This page is for articles and notes on potential and actual responses to the crises.
Organizing for the Anti-Capitalist Transition
by David Harvey
The historical geography of capitalist development is at a key
inflexion point in which the geographical configurations of power are
rapidly shifting at the very moment when the temporal dynamic is facing
very serious constraints. Three-percent compound annual growth
(generally considered the minimum satisfactory growth rate for a
healthy capitalist economy) is becoming less and less feasible to
sustain without resort to all manner of fictions (such as those that
have characterized asset markets and financial affairs over the last
two decades). There are good reasons to believe that there is no
alternative to a new global order of governance that will eventually
have to manage the transition to a zero growth economy. If that is to
be done in an equitable way, then there is no alternative to socialism
or communism. Since the late 1990s, the World Social Forum became the
center for articulating the theme "another world is possible." It must
now take up the task of defining how another socialism or communism is
possible and how the transition to these alternatives is to be
accomplished. The current crisis offers a window of opportunity to
reflect on what might be involved.
The current crisis originated in the steps taken to resolve the crisis of the1970s. These steps included:
(a) The successful assault upon organized labor and its political
institutions while mobilizing global labor surpluses, instituting
labor-saving technological changes, and heightening competition. The
result has been global wage repressions (a declining share of wages in
total GDP almost everywhere) and the creation of an even vaster
disposable labor reserve living under marginal conditions.
(b) Undermining previous structures of monopoly power and displacing
the previous stage of (nation-state) monopoly capitalism by opening up
capitalism to far fiercer international competition. Intensifying
global competition translated into lower non-financial corporate
profits. Uneven geographical development and inter-territorial
competition became key features in capitalist development, opening the
way towards the beginnings of a hegemonic shift of power particularly
but not exclusively towards East Asia.
(c) Utilizing and empowering the most fluid and highly mobile form
of capital -- money capital -- to reallocate capital resources globally
(eventually through electronic markets) thus sparking
deindustrialization in traditional core regions and new forms of
(ultra-oppressive) industrialization and natural resource and
agricultural raw material extractions in emergent markets. The
corollary was to enhance the profitability of financial corporations
and to find new ways to globalize and supposedly absorb risks through
the creation of fictitious capital markets.
(d) At the other end of the social scale, this meant heightened
reliance on "accumulation by dispossession" as a means to augment
capitalist class power. The new rounds of primitive accumulation
against indigenous and peasant populations were augmented by asset
losses of the lower classes in the core economies (as witnessed by the
sub-prime housing market in the US which foisted a huge asset loss
particularly upon African American populations).
(e) The augmentation of otherwise sagging effective demand by
pushing the debt economy (governmental, corporate, and household) to
its limits (particularly in the USA and the UK but also in many other
countries from Latvia to Dubai).
(f) Compensating for anemic rates of return in production by the
construction of a whole series of asset market bubbles, all of which
had a Ponzi character, culminating in the property bubble that burst in
2007-8. These asset bubbles drew upon finance capital and were
facilitated by extensive financial innovations such as derivatives and
collateralized debt obligations.
The political forces that coalesced and mobilized behind these
transitions had a distinctive class character and clothed themselves in
the vestments of a distinctive ideology called neoliberal. The
ideology rested upon the idea that free markets, free trade, personal
initiative, and entrepreneurialism were the best guarantors of
individual liberty and freedom and that the "nanny state" should be
dismantled for the benefit of all. But the practice entailed that the
state must stand behind the integrity of financial institutions, thus
introducing (beginning with the Mexican and developing countries debt
crisis of 1982) "moral hazard" big time into the financial system. The
state (local and national) also became increasingly committed to
providing a "good business climate" to attract investments in a highly
competitive environment. The interests of the people were secondary to
the interests of capital, and in the event of a conflict between them,
the interests of the people had to be sacrificed (as became standard
practice in IMF structural adjustments programs from the early 1980s
onwards). The system that has been created amounts to a veritable form
of communism for the capitalist class.
These conditions varied considerably, of course, depending upon what
part of the world one inhabited, the class relations prevailing there,
the political and cultural traditions, and how the balance of
political-economic power was shifting.
So how can the left negotiate the dynamics of this crisis? At times
of crisis, the irrationality of capitalism becomes plain for all to
see. Surplus capital and surplus labor exist side by side with
seemingly no way to put them back together in the midst of immense
human suffering and unmet needs. In midsummer of 2009, one third of
the capital equipment in the United States stood idle, while some 17
per cent of the workforce were either unemployed, enforced part-timers,
or "discouraged" workers. What could be more irrational than that!
Can capitalism survive the present trauma? Yes. But at what cost?
This question masks another. Can the capitalist class reproduce its
power in the face of the raft of economic, social, political,
geopolitical, and environmental difficulties? Again, the answer is a
resounding "yes." But the mass of the people will have to surrender
the fruits of their labor to those in power, to surrender many of their
rights and their hard-won asset values (in everything from housing to
pension rights), and to suffer environmental degradations galore, to
say nothing of serial reductions in their living standards, which means
starvation for many of those already struggling to survive at rock
bottom. Class inequalities will increase (as we already see
happening). All of that may require more than a little political
repression, police violence, and militarized state control to stifle
Since much of this is unpredictable and since the spaces of the
global economy are so variable, then uncertainties as to outcomes are
heightened at times of crisis. All manner of localized possibilities
arise for either nascent capitalists in some new space to seize
opportunities to challenge older class and territorial hegemonies (as
when Silicon Valley replaced Detroit from the mid-1970s onwards in the
United States) or for radical movements to challenge the reproduction
of an already destabilized class power. To say that the capitalist
class and capitalism can survive is not to say that they are
predestined to do so nor does it say that their future character is
given. Crises are moments of paradox and possibilities.
So what will happen this time around? If we are to get back to
three-percent growth, then this means finding new and profitable global
investment opportunities for $1.6 trillion in 2010 rising to closer to
$3 trillion by 2030. This contrasts with the $0.15 trillion new
investment needed in 1950 and the $0.42 trillion needed in 1973 (the
dollar figures are inflation adjusted). Real problems of finding
adequate outlets for surplus capital began to emerge after 1980, even
with the opening up of China and the collapse of the Soviet Bloc. The
difficulties were in part resolved by creation of fictitious markets
where speculation in asset values could take off unhindered. Where
will all this investment go now?
Leaving aside the undisputable constraints in the relation to nature
(with global warming of paramount importance), the other potential
barriers of effective demand in the market place, of technologies, and
of geographical/geopolitical distributions are likely to be profound,
even supposing, which is unlikely, that no serious active oppositions
to continuous capital accumulation and further consolidation of class
power materialize. What spaces are left in the global economy for new
spatial fixes for capital surplus absorption? China and the ex-Soviet
bloc have already been integrated. South and Southeast Asia is filling
up fast. Africa is not yet fully integrated but there is nowhere else
with the capacity to absorb all this surplus capital. What new lines
of production can be opened up to absorb growth? There may be no
effective long-run capitalist solutions (apart from reversion to
fictitious capital manipulations) to this crisis of capitalism. At
some point quantitative changes lead to qualitative shifts and we need
to take seriously the idea that we may be at exactly such an inflexion
point in the history of capitalism. Questioning the future of
capitalism itself as an adequate social system ought, therefore, to be
in the forefront of current debate.
Yet there appears to be little appetite for such discussion, even
among the left. Instead we continue to hear the usual conventional
mantras regarding the perfectibility of humanity with the help of free
markets and free trade, private property and personal responsibility,
low taxes and minimalist state involvement in social provision, even
though this all sounds increasingly hollow. A crisis of legitimacy
looms. But legitimation crises typically unfold at a different pace
and rhythm to that of stock markets. It took, for example, three or
four years before the stock market crash of 1929 produced the massive
social movements (both progressive and fascistic) after 1932 or so.
The intensity of the current pursuit by political power of ways to
exit the present crisis may have something to do with the political
fear of looming illegitimacy.
The last thirty years, however, has seen the emergence of systems of
governance that seem immune to legitimacy problems and unconcerned even
with the creation of consent. The mix of authoritarianism, monetary
corruption of representative democracy, surveillance, policing and
militarization (particularly through the war on terror), media control
and spin suggests a world in which the control of discontent through
disinformation, fragmentations of oppositions, and the shaping of
oppositional cultures through the promotion of NGOs tends to prevail
with plenty of coercive force to back it up if necessary.
The idea that the crisis had systemic origins is scarcely mooted in
the mainstream media (even as a few mainstream economists like
Stiglitz, Krugman, and even Jeffrey Sachs attempt to steal some of the
left's historical thunder by confessing to an epiphany or two). Most
of the governmental moves to contain the crisis in North America and
Europe amount to the perpetuation of business as usual which translates
into support for the capitalist class. The "moral hazard" that was the
immediate trigger for the financial failures is being taken to new
heights in the bank bailouts. The actual practices of neoliberalism
(as opposed to its utopian theory) always entailed blatant support for
finance capital and capitalist elites (usually on the grounds that
financial institutions must be protected at all costs and that it is
the duty of state power to create a good business climate for solid
profiteering). This has not fundamentally changed. Such practices are
justified by appeal to the dubious proposition that a "rising tide" of
capitalist endeavor will "lift all boats" or that the benefits of
compound growth will magically "trickle down" (which it never does
except in the form of a few crumbs from the rich folks' table).
So how will the capitalist class exit the current crisis and how
swift will the exit be? The rebound in stock market values from
Shanghai and Tokyo to Frankfurt, London, and New York is a good sign,
we are told, even as unemployment pretty much everywhere continues to
rise. But notice the class bias in that measure. We are enjoined to
rejoice in the rebound in stock values for the capitalists because it
always precedes, it is said, a rebound in the "real economy" where jobs
for the workers are created and incomes earned. The fact that the last
stock rebound in the United States after 2002 turned out to be a
"jobless recovery" appears to have been forgotten already. The
Anglo-Saxon public in particular appears to be seriously afflicted with
amnesia. It too easily forgets and forgives the transgressions of the
capitalist class and the periodic disasters its actions precipitate.
The capitalist media are happy to promote such amnesia.
China and India are still growing, the former by leaps and bounds.
But in China's case, the cost is a huge expansion of bank lending on
risky projects (the Chinese banks were not caught up in the global
speculative frenzy but now are continuing it). The overaccumulation of
productive capacity proceeds apace, and long-term infrastructural
investments, whose productivity will not be known for several years,
are booming (even in urban property markets). And China's burgeoning
demand is entraining those economies supplying raw materials, like
Australia and Chile. The likelihood of a subsequent crash in China
cannot be dismissed but it may take time to discern (a long-term
version of Dubai). Meanwhile the global epicenter of capitalism
accelerates its shift primarily towards East Asia.
In the older financial centers, the young financial sharks have
taken their bonuses of yesteryear and collectively started boutique
financial institutions to circle Wall Street and the City of London, to
sift through the detritus of yesterday's financial giants to snaffle up
the juicy bits and start all over again. The investment banks that
remain in the US -- Goldman Sachs and J.P. Morgan -- though
reincarnated as bank holding companies have gained exemption (thanks to
the Federal Reserve) from regulatory requirements and are making huge
profits (and setting aside moneys for huge bonuses to match) out of
speculating, dangerously using taxpayers' money in unregulated and
still booming derivative markets. The leveraging that got us into the
crisis has resumed big time as if nothing has happened. Innovations in
finance are on the march as new ways to package and sell fictitious
capital debts are being pioneered and offered to institutions (such as
pension funds) desperate to find new outlets for surplus capital. The
fictions (as well as the bonuses) are back!
Consortia are buying up foreclosed properties, either waiting for
the market to turn before making a killing or banking high value land
for a future moment of active redevelopment. The regular banks are
stashing away cash, much of it garnered from the public coffers, also
with an eye to resuming bonus payments consistent with a former
lifestyle while a whole host of entrepreneurs hover in the wings
waiting to seize this moment of creative destruction backed by a flood
of public moneys.
Meanwhile raw money power wielded by the few undermines all
semblances of democratic governance. The pharmaceutical, health
insurance, and hospital lobbies, for example, spent more than $133
million in the first three months of 2009 to make sure they got their
way on health care reform in the United States. Max Baucus, head of
the key Senate finance committee that shaped the health care bill,
received $1.5 million for a bill that delivers a vast number of new
clients to the insurance companies with few protections against
ruthless exploitation and profiteering (Wall Street is delighted).
Another electoral cycle, legally corrupted by immense money power,
will soon be upon us. In the United States, the parties of "K Street"
and of Wall Street will be duly re-elected as working Americans are
exhorted to work their way out of the mess that the ruling class has
created. We have been in such dire straits before, we are reminded,
and each time, working Americans have rolled up their sleeves,
tightened their belts, and saved the system from some mysterious
mechanics of auto-destruction for which the ruling class denies all
responsibility. Personal responsibility is, after all, for the workers
and not for the capitalists.
If this is the outline of the exit strategy then almost certainly we
will be in another mess within five years. The faster we come out of
this crisis and the less excess capital is destroyed now, the less room
there will be for the revival of long-term active growth. The loss of
asset values at this conjuncture (mid 2009) is, we are told by the IMF,
at least $55 trillion, which is equivalent to almost exactly one year's
global output of goods and services. Already we are back to the output
levels of 1989. We may be looking at losses of $400 trillion or more
before we are through. Indeed, in a recent startling calculation, it
was suggested that the US state alone was on the hook to guarantee more
than $200 trillion in asset values. The likelihood that all of those
assets would go bad is very minimal, but the thought that many of them
could is sobering in the extreme. Just to take a concrete example:
Fannie Mae and Freddie Mac, now taken over by the US Government, own or
guarantee more than $5 trillion in home loans, many of which are in
deep trouble (losses of more than $150 billion were recorded in 2008
alone). So what, then, are the alternatives?
It has long been the dream of many in the world that an alternative
to capitalist (ir)rationality can be defined and rationally arrived at
through the mobilization of human passions in the collective search for
a better life for all. These alternatives -- historically called
socialism or communism -- have, in various times and places, been
tried. In former times, such as the 1930s, the vision of one or other
of them operated as a beacon of hope. But in recent times they have
both lost their luster, been dismissed as wanting, not only because of
the failure of historical experiments with communism to make good on
their promises and the penchant for communist regimes to cover over
their mistakes by repression, but also because of their supposedly
flawed presuppositions concerning human nature and the potential
perfectibility of the human personality and of human institutions.
The difference between socialism and communism is worth noting.
Socialism aims to democratically manage and regulate capitalism in
ways that calm its excesses and redistribute its benefits for the
common good. It is about spreading the wealth around through
progressive taxation arrangements while basic needs -- such as
education, health care and even housing -- are provided by the state
out of reach of market forces. Many of the key achievements of
redistributive socialism in the period after 1945, not only in Europe
but beyond, have become so socially embedded as to be immune from
neoliberal assault. Even in the United States, Social Security and
Medicare are extremely popular programs that right-wing forces find it
almost impossible to dislodge. The Thatcherites in Britain could not
touch national health care except at the margins. Social provision in
Scandinavia and most of Western Europe seems to be an unshakable
bedrock of the social order.
Communism, on the other hand, seeks to displace capitalism by
creating an entirely different mode of both production and distribution
of goods and services. In the history of actually existing communism,
social control over production, exchange, and distribution meant state
control and systematic state planning. In the long run this proved to
be unsuccessful though, interestingly, its conversion in China (and its
earlier adoption in places like Singapore) has proven far more
successful than the pure neoliberal model in generating capitalist
growth for reasons that cannot be elaborated upon here. Contemporary
attempts to revive the communist hypothesis typically abjure state
control and look to other forms of collective social organization to
displace market forces and capital accumulation as the basis for
organizing production and distribution. Horizontally networked as
opposed to hierarchically commanded systems of coordination between
autonomously organized and self-governing collectives of producers and
consumers are envisaged as lying at the core of a new form of
communism. Contemporary technologies of communication make such a
system seem feasible. All manner of small-scale experiments around the
world can be found in which such economic and political forms are being
constructed. In this there is a convergence of some sort between the
Marxist and anarchist traditions that harks back to the broadly
collaborative situation between them in the 1860s in Europe.
While nothing is certain, it could be that 2009 marks the beginning
of a prolonged shakeout in which the question of grand and far-reaching
alternatives to capitalism will step-by-step bubble up to the surface
in one part of the world or another. The longer the uncertainty and
the misery is prolonged, the more the legitimacy of the existing way of
doing business will be questioned and the more the demand to build
something different will escalate. Radical as opposed to band-aid
reforms to patch up the financial system may seem more necessary.
The uneven development of capitalist practices throughout the world
has produced, moreover, anti-capitalist movements all over the place.
The state-centric economies of much of East Asia generate different
discontents (as in Japan and China) compared to the churning
anti-neoliberal struggles occurring throughout much of Latin America
where the Bolivarian revolutionary movement of popular power exists in
a peculiar relationship to capitalist class interests that have yet to
be truly confronted. Differences over tactics and policies in response
to the crisis among the states that make up the European Union are
increasing even as a second attempt to come up with a unified EU
constitution is under way. Revolutionary and resolutely
anti-capitalist movements are also to be found, though not all of them
are of a progressive sort, in many of the marginal zones of capitalism.
Spaces have been opened up within which something radically different
in terms of dominant social relations, ways of life, productive
capacities, and mental conceptions of the world can flourish. This
applies as much to the Taliban and to communist rule in Nepal as to the
Zapatistas in Chiapas and indigenous movements in Bolivia, and the
Maoist movements in rural India, even as they are worlds apart in
objectives, strategies, and tactics.
The central problem is that in aggregate there is no resolute and
sufficiently unified anti-capitalist movement that can adequately
challenge the reproduction of the capitalist class and the perpetuation
of its power on the world stage. Neither is there any obvious way to
attack the bastions of privilege for capitalist elites or to curb their
inordinate money power and military might. While openings exist
towards some alternative social order, no one really knows where or
what it is. But just because there is no political force capable of
articulating let alone mounting such a program, this is no reason to
hold back on outlining alternatives.
Lenin's famous question "what is to be done?" cannot be answered, to
be sure, without some sense of who it is might do it where. But a
global anti-capitalist movement is unlikely to emerge without some
animating vision of what is to be done and why. A double blockage
exists: the lack of an alternative vision prevents the formation of an
oppositional movement, while the absence of such a movement precludes
the articulation of an alternative. How, then, can this blockage be
transcended? The relation between the vision of what is to be done and
why and the formation of a political movement across particular places
to do it has to be turned into a spiral. Each has to reinforce the
other if anything is actually to get done. Otherwise potential
opposition will be forever locked down into a closed circle that
frustrates all prospects for constructive change, leaving us vulnerable
to perpetual future crises of capitalism with increasingly deadly
results. Lenin's question demands an answer.
The central problem to be addressed is clear enough. Compound
growth for ever is not possible and the troubles that have beset the
world these last thirty years signal that a limit is looming to
continuous capital accumulation that cannot be transcended except by
creating fictions that cannot last. Add to this the facts that so many
people in the world live in conditions of abject poverty, that
environmental degradations are spiraling out of control, that human
dignities are everywhere being offended even as the rich are piling up
more and more wealth (the number of billionaires in India doubled last
year from 27 to 52) under their command, and that the levers of
political, institutional, judicial, military, and media power are under
such tight but dogmatic political control as to be incapable of doing
much more than perpetuating the status quo and frustrating discontent.
A revolutionary politics that can grasp the nettle of endless
compound capital accumulation and eventually shut it down as the prime
motor of human history requires a sophisticated understanding of how
social change occurs. The failings of past endeavors to build a
lasting socialism and communism have to be avoided and lessons from
that immensely complicated history must be learned. Yet the absolute
necessity for a coherent anti-capitalist revolutionary movement must
also be recognized. The fundamental aim of that movement is to assume
social command over both the production and distribution of surpluses.
We urgently need an explicit revolutionary theory suited to our
times. I propose a "co-revolutionary theory" derived from an
understanding of Marx's account of how capitalism arose out of
feudalism. Social change arises through the dialectical unfolding of
relations between seven moments within the body politic of capitalism
viewed as an ensemble or assemblage of activities and practices:
a) technological and organizational forms of production, exchange, and consumption
b) relations to nature
c) social relations between people
d) mental conceptions of the world, embracing knowledges and cultural understandings and beliefs
e) labor processes and production of specific goods, geographies, services, or affects
f) institutional, legal and governmental arrangements
g) the conduct of daily life that underpins social reproduction.
Each one of these moments is internally dynamic and internally
marked by tensions and contradictions (just think of mental conceptions
of the world) but all of them are co-dependent and co-evolve in
relation to each other. The transition to capitalism entailed a
mutually supporting movement across all seven moments. New
technologies could not be identified and practices without new mental
conceptions of the world (including that of the relation to nature and
social relations). Social theorists have the habit of taking just one
of these moments and viewing it as the "silver bullet" that causes all
change. We have technological determinists (Tom Friedman),
environmental determinists (Jared Diamond), daily life determinists
(Paul Hawken), labor process determinists (the autonomistas),
institutionalists, and so on and so forth. They are all wrong. It is
the dialectical motion across all of these moments that really counts
even as there is uneven development in that motion.
When capitalism itself undergoes one of its phases of renewal, it
does so precisely by co-evolving all moments, obviously not without
tensions, struggles, fights, and contradictions. But consider how
these seven moments were configured around 1970 before the neoliberal
surge and consider how they look now, and you will see they have all
changed in ways that re-define the operative characteristics of
capitalism viewed as a non-Hegelian totality.
An anti-capitalist political movement can start anywhere (in labor
processes, around mental conceptions, in the relation to nature, in
social relations, in the design of revolutionary technologies and
organizational forms, out of daily life, or through attempts to reform
institutional and administrative structures including the
reconfiguration of state powers). The trick is to keep the political
movement moving from one moment to another in mutually reinforcing
ways. This was how capitalism arose out of feudalism and this is how
something radically different called communism, socialism, or whatever
must arise out of capitalism. Previous attempts to create a communist
or socialist alternative fatally failed to keep the dialectic between
the different moments in motion and failed to embrace the
unpredictabilities and uncertainties in the dialectical movement
between them. Capitalism has survived precisely by keeping the
dialectical movement between the moments going and constructively
embracing the inevitable tensions, including crises, that result.
Change arises, of course, out of an existing state of affairs and it
has to harness the possibilities immanent within an existing situation.
Since the existing situation varies enormously from Nepal, to the
Pacific regions of Bolivia, to the deindustrializing cities of Michigan
and the still booming cities of Mumbai and Shanghai and the shaken but
by no means destroyed financial centers of New York and London, so all
manner of experiments in social change in different places and at
different geographical scales are both likely and potentially
illuminating as ways to make (or not make) another world possible. And
in each instance it may seem as if one or other aspect of the existing
situation holds the key to a different political future. But the first
rule for a global anti-capitalist movement must be: never rely on the
unfolding dynamics of one moment without carefully calibrating how
relations with all the others are adapting and reverberating.
Feasible future possibilities arise out of the existing state of
relations between the different moments. Strategic political
interventions within and across the spheres can gradually move the
social order onto a different developmental path. This is what wise
leaders and forward-looking institutions do all the time in local
situations, so there is no reason to think there is anything
particularly fantastic or utopian about acting in this way. The left
has to look to build alliances between and across those working in the
distinctive spheres. An anti-capitalist movement has to be far broader
than groups mobilizing around social relations or over questions of
daily life in themselves. Traditional hostilities between, for
example, those with technical, scientific, and administrative expertise
and those animating social movements on the ground have to be addressed
and overcome. We now have to hand, in the example of the climate
change movement, a significant example of how such alliances can begin
In this instance the relation to nature is the beginning point, but
everyone realizes that something has to give on all the other moments,
and while there is a wishful politics that wants to see the solution as
purely technological, it becomes clearer by the day that daily life,
mental conceptions, institutional arrangements, production processes,
and social relations have to be involved. And all of that means a
movement to restructure capitalist society as a whole and to confront
the growth logic that underlies the problem in the first place.
There have, however, to be some loosely agreed-upon common
objectives in any transitional movement. Some general guiding norms
can be set down. These might include (and I just float these norms
here for discussion) respect for nature, radical egalitarianism in
social relations, institutional arrangements based in some sense of
common interests and common property, democratic administrative
procedures (as opposed to the monetized shams that now exist), labor
processes organized by the direct producers, daily life as the free
exploration of new kinds of social relations and living arrangements,
mental conceptions that focus on self-realization in service to others,
and technological and organizational innovations oriented to the
pursuit of the common good rather than to supporting militarized power,
surveillance, and corporate greed. These could be the co-revolutionary
points around which social action could converge and rotate. Of course
this is utopian! But so what! We cannot afford not to be.
Let me detail one particular aspect of the problem which arises in
the place where I work. Ideas have consequences and false ideas can
have devastating consequences. Policy failures based on erroneous
economic thinking played a crucial role in both the run-up to the
debacle of the 1930s and in the seeming inability to find an adequate
way out. Though there is no agreement among historians and economists
as to exactly what policies failed, it is agreed that the knowledge
structure through which the crisis was understood needed to be
revolutionized. Keynes and his colleagues accomplished that task. But
by the mid-1970s, it became clear that the Keynesian policy tools were
no longer working at least in the way they were being applied, and it
was in this context that monetarism, supply-side theory, and the
(beautiful) mathematical modeling of micro-economic market behaviors
supplanted broad-brush macro-economic Keynesian thinking. The
monetarist and narrower neoliberal theoretical frame that dominated
after 1980 is now in question. In fact it has disastrously failed.
We need new mental conceptions to understand the world. What might
these be and who will produce them, given both the sociological and
intellectual malaise that hangs over knowledge production and (equally
important) dissemination more generally? The deeply entrenched mental
conceptions associated with neoliberal theories and the
neoliberalization and corporatization of the universities and the media
has played more than a trivial role in the production of the present
crisis. For example, the whole question of what to do about the
financial system, the banking sector, the state-finance nexus, and the
power of private property rights cannot be broached without going
outside of the box of conventional thinking. For this to happen will
require a revolution in thinking, in places as diverse as the
universities, the media, and government as well as within the financial
Karl Marx, while not in any way inclined to embrace philosophical
idealism, held that ideas are a material force in history. Mental
conceptions constitute, after all, one of the seven moments in his
general theory of co-revolutionary change. Autonomous developments and
inner conflicts over what mental conceptions shall become hegemonic
therefore have an important historical role to play. It was for this
reason that Marx (along with Engels) wrote The Communist Manifesto, Capital,
and innumerable other works. These works provide a systematic
critique, albeit incomplete, of capitalism and its crisis tendencies.
But as Marx also insisted, it was only when these critical ideas
carried over into the fields of institutional arrangements,
organizational forms, production systems, daily life, social relations,
technologies, and relations to nature that the world would truly change.
Since Marx's goal was to change the world and not merely to
understand it, ideas had to be formulated with a certain revolutionary
intent. This inevitably meant a conflict with modes of thought more
convivial to and useful for the ruling class. The fact that Marx's
oppositional ideas, particularly in recent years, have been the target
of repeated repressions and exclusions (to say nothing of
bowdlerizations and misrepresentations galore) suggests that his ideas
may be too dangerous for the ruling classes to tolerate. While Keynes
repeatedly avowed that he had never read Marx, he was surrounded and
influenced in the 1930s by many people (like his economist colleague
Joan Robinson) who had. While many of them objected vociferously to
Marx's foundational concepts and his dialectical mode of reasoning,
they were acutely aware of and deeply affected by some of his more
prescient conclusions. It is fair to say, I think, that the Keynesian
theory revolution could not have been accomplished without the
subversive presence of Marx lurking in the wings.
The trouble in these times is that most people have no idea who
Keynes was and what he really stood for while the knowledge of Marx is
negligible. The repression of critical and radical currents of
thought, or to be more exact the corralling of radicalism within the
bounds of multiculturalism, identity politics, and cultural choice,
creates a lamentable situation within the academy and beyond, no
different in principle to having to ask the bankers who made the mess
to clean it up with exactly the same tools as they used to get into it.
Broad adhesion to post-modern and post-structuralist ideas which
celebrate the particular at the expense of big-picture thinking does
not help. To be sure, the local and the particular are vitally
important and theories that cannot embrace, for example, geographical
difference, are worse than useless. But when that fact is used to
exclude anything larger than parish politics then the betrayal of the
intellectuals and abrogation of their traditional role become complete.
The current populations of academicians, intellectuals, and experts
in the social sciences and humanities are by and large ill-equipped to
undertake the collective task of revolutionizing our knowledge
structures. They have, in fact, been deeply implicated in the
construction of the new systems of neoliberal governmentality that
evade questions of legitimacy and democracy and foster a technocratic
authoritarian politics. Few seem predisposed to engage in
self-critical reflection. Universities continue to promote the same
useless courses on neo-classical economic or rational choice political
theory as if nothing has happened and the vaunted business schools
simply add a course or two on business ethics or how to make money out
of other people's bankruptcies. After all, the crisis arose out of
human greed and there is nothing that can be done about that!
The current knowledge structure is clearly dysfunctional and equally
clearly illegitimate. The only hope is that a new generation of
perceptive students (in the broad sense of all those who seek to know
the world) will clearly see it so and insist upon changing it. This
happened in the 1960s. At various other critical points in history
student-inspired movements, recognizing the disjunction between what is
happening in the world and what they are being taught and fed by the
media, were prepared to do something about it. There are signs, from
Tehran to Athens and onto many European university campuses of such a
movement. How the new generation of students in China will act must
surely be of deep concern in the corridors of political power in
A student-led and youthful revolutionary movement, with all of its
evident uncertainties and problems, is a necessary but not sufficient
condition to produce that revolution in mental conceptions that can
lead us to a more rational solution to the current problems of endless
What, more broadly, would happen if an anti-capitalist movement were
constituted out of a broad alliance of the alienated, the discontented,
the deprived, and the dispossessed? The image of all such people
everywhere rising up and demanding and achieving their proper place in
economic, social, and political life is stirring indeed. It also helps
focus on the question of what it is they might demand and what it is
that needs to be done.
Revolutionary transformations cannot be accomplished without at the
very minimum changing our ideas, abandoning cherished beliefs and
prejudices, giving up various daily comforts and rights, submitting to
some new daily life regimen, changing our social and political roles,
reassigning our rights, duties, and responsibilities, and altering our
behaviors to better conform to collective needs and a common will. The
world around us -- our geographies -- must be radically re-shaped as
must our social relations, the relation to nature, and all of the other
moments in the co-revolutionary process. It is understandable, to some
degree, that many prefer a politics of denial to a politics of active
confrontation with all of this.
It would also be comforting to think that all of this could be
accomplished pacifically and voluntarily, that we would dispossess
ourselves, strip ourselves bare, as it were, of all that we now possess
that stands in the way of the creation of a more socially just,
steady-state social order. But it would be disingenuous to imagine
that this could be so, that no active struggle will be involved,
including some degree of violence. Capitalism came into the world, as
Marx once put it, bathed in blood and fire. Although it might be
possible to do a better job of getting out from under it than getting
into it, the odds are heavily against any purely pacific passage to the
There are various broad fractious currents of thought on the left as
to how to address the problems that now confront us. There is, first
of all, the usual sectarianism stemming from the history of radical
action and the articulations of left political theory. Curiously, the
one place where amnesia is not so prevalent is within the left (the
splits between anarchists and Marxists that occurred back in the 1870s,
between Trotskyists, Maoists, and orthodox Communists, between the
centralizers who want to command the state and the anti-statist
autonomists and anarchists). The arguments are so bitter and so
fractious as to sometimes make one think that more amnesia might be a
good thing. But beyond these traditional revolutionary sects and
political factions, the whole field of political action has undergone a
radical transformation since the mid-1970s. The terrain of political
struggle and of political possibilities has shifted, both
geographically and organizationally.
There are now vast numbers of non-governmental organizations (NGO's)
that play a political role that was scarcely visible before the
mid-1970s. Funded by both state and private interests, populated often
by idealist thinkers and organizers (they constitute a vast employment
program), and for the most part dedicated to single-issue questions
(environment, poverty, women's rights, anti-slavery and trafficking
work, etc), they refrain from straight anti-capitalist politics even as
they espouse progressive ideas and causes. In some instances, however,
they are actively neoliberal, engaging in privatization of state
welfare functions or fostering institutional reforms to facilitate
market integration of marginalized populations (microcredit and
microfinance schemes for low-income populations are a classic example
While there are many radical and dedicated practitioners in this NGO
world, their work is at best ameliorative. Collectively, they have a
spotty record of progressive achievements, although in certain arenas,
such as women's rights, health care, and environmental preservation,
they can reasonably claim to have made major contributions to human
betterment. But revolutionary change by NGO is impossible. They are
too constrained by the political and policy stances of their donors.
So even though, in supporting local empowerment, they help open up
spaces where anti-capitalist alternatives become possible and even
support experimentation with such alternatives, they do nothing to
prevent the re-absorption of these alternatives into the dominant
capitalist practice: they even encourage it. The collective power of
NGOs in these times is reflected in the dominant role they play in the
World Social Forum, where attempts to forge a global justice movement,
a global alternative to neoliberalism, have been concentrated over the
last ten years.
The second broad wing of opposition arises out of anarchist,
autonomist, and grassroots organizations (GROs) which refuse outside
funding even as some of them do rely upon some alternative
institutional base (such as the Catholic Church with its "base
community" initiatives in Latin America or broader church sponsorship
of political mobilization in the inner cities of the United States).
This group is far from homogeneous (indeed there are bitter disputes
among them pitting, for example, social anarchists against those they
scathingly refer to as mere "lifestyle" anarchists). There is,
however, a common antipathy to negotiation with state power and an
emphasis upon civil society as the sphere where change can be
accomplished. The self-organizing powers of people in the daily
situations in which they live has to be the basis for any
anti-capitalist alternative. Horizontal networking is their preferred
organizing model. So-called "solidarity economies" based on bartering,
collectives, and local production systems is their preferred political
economic form. They typically oppose the idea that any central
direction might be necessary and reject hierarchical social relations
or hierarchical political power structures along with conventional
political parties. Organizations of this sort can be found everywhere
and in some places have achieved a high degree of political prominence.
Some of them are radically anti-capitalist in their stance and espouse
revolutionary objectives and in some instances are prepared to advocate
sabotage and other forms of disruption (shades of the Red Brigades in
Italy, the Baader Meinhof in Germany, and the Weather Underground in
the United States in the 1970s). But the effectiveness of all these
movements (leaving aside their more violent fringes) is limited by
their reluctance and inability to scale up their activism into
large-scale organizational forms capable of confronting global
problems. The presumption that local action is the only meaningful
level of change and that anything that smacks of hierarchy is
anti-revolutionary is self-defeating when it comes to larger questions.
Yet these movements are unquestionably providing a widespread base for
experimentation with anti-capitalist politics.
The third broad trend is given by the transformation that has been
occurring in traditional labor organizing and left political parties,
varying from social democratic traditions to more radical Trotskyist
and Communist forms of political party organization. This trend is not
hostile to the conquest of state power or hierarchical forms of
organization. Indeed, it regards the latter as necessary to the
integration of political organization across a variety of political
scales. In the years when social democracy was hegemonic in Europe and
even influential in the United States, state control over the
distribution of the surplus became a crucial tool to diminish
inequalities. The failure to take social control over the production
of surpluses and thereby really challenge the power of the capitalist
class was the Achilles heel of this political system, but we should not
forget the advances that it made even if it is now clearly insufficient
to go back to such a political model with its social welfarism and
Keynesian economics. The Bolivarian movement in Latin America and the
ascent to state power of progressive social democratic governments is
one of the most hopeful signs of a resuscitation of a new form of left
Both organized labor and left political parties have taken some hard
hits in the advanced capitalist world over the last thirty years. Both
have either been convinced or coerced into broad support for
neoliberalization, albeit with a somewhat more human face. One way to
look upon neoliberalism, as was earlier noted, is as a grand and quite
revolutionary movement (led by that self-proclaimed revolutionary
figure, Margaret Thatcher) to privatize the surpluses or at least
prevent their further socialization.
While there are some signs of recovery of both labor organizing and
left politics (as opposed to the "third way" celebrated by New Labor in
Britain under Tony Blair and disastrously copied by many social
democratic parties in Europe) along with signs of the emergence of more
radical political parties in different parts of the world, the
exclusive reliance upon a vanguard of workers is now in question as is
the ability of those leftist parties that gain some access to political
power to have a substantive impact upon the development of capitalism
and to cope with the troubled dynamics of crisis-prone accumulation.
The performance of the German Green Party in power has hardly been
stellar relative to their political stance out of power and social
democratic parties have lost their way entirely as a true political
force. But left political parties and labor unions are significant
still, and their takeover of aspects of state power, as with the
Workers' Party in Brazil or the Bolivarian movement in Venezuela, has
had a clear impact on left thinking, not only in Latin America. The
complicated problem of how to interpret the role of the Communist Party
in China, with its exclusive control over political power, and what its
future policies might be about is not easily resolved either.
The co-revolutionary theory earlier laid out would suggest that
there is no way that an anti-capitalist social order can be constructed
without seizing state power, radically transforming it, and re-working
the constitutional and institutional framework that currently supports
private property, the market system, and endless capital accumulation.
Inter-state competition and geoeconomic and geopolitical struggles
over everything from trade and money to questions of hegemony are also
far too significant to be left to local social movements or cast aside
as too big to contemplate. How the architecture of the state-finance
nexus is to be re-worked along with the pressing question of the common
measure of value given by money cannot be ignored in the quest to
construct alternatives to capitalist political economy. To ignore the
state and the dynamics of the inter-state system is therefore a
ridiculous idea for any anti-capitalist revolutionary movement to
The fourth broad trend is constituted by all the social movements
that are not so much guided by any particular political philosophy or
leanings but by the pragmatic need to resist displacement and
dispossession (through gentrification, industrial development, dam
construction, water privatization, the dismantling of social services
and public educational opportunities, or whatever). In this instance
the focus on daily life in the city, town, village, or wherever
provides a material base for political organizing against the threats
that state policies and capitalist interests invariably pose to
vulnerable populations. These forms of protest politics are massive.
Again, there is a vast array of social movements of this sort, some
of which can become radicalized over time as they more and more realize
that the problems are systemic rather than particular and local. The
bringing together of such social movements into alliances on the land
(like the Via Campesina, the landless peasant movement in Brazil, or
peasants mobilizing against land and resource grabs by capitalist
corporations in India) or in urban contexts (the right to the city and
take back the land movements in Brazil and now the United States)
suggests the way may be open to create broader alliances to discuss and
confront the systemic forces that underpin the particularities of
gentrification, dam construction, privatization, or whatever. More
pragmatic rather than driven by ideological preconceptions, these
movements nevertheless can arrive at systemic understandings out of
their own experience. To the degree that many of them exist in the
same space, such as within the metropolis, they can (as supposedly
happened with the factory workers in the early stages of the industrial
revolution) make common cause and begin to forge, on the basis of their
own experience, a consciousness of how capitalism works and what it is
that might collectively be done. This is the terrain where the figure
of the "organic intellectual" leader, made so much of in Antonio
Gramsci's work, the autodidact who comes to understand the world
firsthand through bitter experiences but shapes his or her
understanding of capitalism more generally, has a great deal to say.
To listen to peasant leaders of the MST in Brazil or the leaders of
the anti-corporate land grab movement in India is a privileged
education. In this instance the task of the educated alienated and
discontented is to magnify the subaltern voice so that attention can be
paid to the circumstances of exploitation and repression and the
answers that can be shaped into an anti-capitalist program.
The fifth epicenter for social change lies with the emancipatory
movements around questions of identity -- women, children, gays,
racial, ethnic, and religious minorities all demand an equal place in
the sun -- along with the vast array of environmental movements that
are not explicitly anti-capitalist. The movements claiming
emancipation on each of these issues are geographically uneven and
often geographically divided in terms of needs and aspirations. But
global conferences on women's rights (Nairobi in 1985 that led to the
Beijing declaration of 1995) and anti-racism (the far more contentious
conference in Durban in 2001) are attempting to find common ground, as
is true also of the environmental conferences, and there is no question
that social relations are changing along all of these dimensions at
least in some parts of the world. When cast in narrow essentialist
terms, these movements can appear to be antagonistic to class struggle.
Certainly within much of the academy they have taken priority of place
at the expense of class analysis and political economy. But the
feminization of the global labor force, the feminization of poverty
almost everywhere, and the use of gender disparities as a means of
labor control make the emancipation and eventual liberation of women
from their repressions a necessary condition for class struggle to
sharpen its focus. The same observation applies to all the other
identity forms where discrimination or outright repression can be
found. Racism and the oppression of women and children were
foundational in the rise of capitalism. But capitalism as currently
constituted can in principle survive without these forms of
discrimination and oppression, though its political ability to do so
will be severely curtailed if not mortally wounded in the face of a
more unified class force. The modest embrace of multiculturalism and
women's rights within the corporate world, particularly in the United
States, provides some evidence of capitalism's accommodation to these
dimensions of social change (including the environment), even as it
re-emphasizes the salience of class divisions as the principle
dimension for political action.
These five broad tendencies are not mutually exclusive or exhaustive
of organizational templates for political action. Some organizations
neatly combine aspects of all five tendencies. But there is a lot of
work to be done to coalesce these various tendencies around the
underlying question: can the world change materially, socially,
mentally, and politically in such a way as to confront not only the
dire state of social and natural relations in so many parts of the
world, but also the perpetuation of endless compound growth? This is
the question that the alienated and discontented must insist upon
asking, again and again, even as they learn from those who experience
the pain directly and who are so adept at organizing resistances to the
dire consequences of compound growth on the ground.
Communists, Marx and Engels averred in their original conception laid out in The Communist Manifesto,
have no political party. They simply constitute themselves at all
times and in all places as those who understand the limits, failings,
and destructive tendencies of the capitalist order as well as the
innumerable ideological masks and false legitimations that capitalists
and their apologists (particularly in the media) produce in order to
perpetuate their singular class power. Communists are all those who
work incessantly to produce a different future to that which capitalism
portends. This is an interesting definition. While traditional
institutionalized communism is as good as dead and buried, there are by
this definition millions of de facto communists active among us,
willing to act upon their understandings, ready to creatively pursue
anti-capitalist imperatives. If, as the alternative globalization
movement of the late 1990s declared, 'another world is possible' then
why not also say 'another communism is possible'? The current
circumstances of capitalist development demand something of this sort,
if fundamental change is to be achieved.
prol-position has published an interesting article by Bruno Astarian on class struggles in the US following the crash of 1929:
Reactions of the American proletariat during the 1929 crisis
In 1930-33, the situation of the American proletariat declined sharply. While not putting capitalist domination on the line, the proletariat was far from apathetic during that period. This text intends merely to summarize the various forms and phases of resistance by the American proletariat to its deteriorating conditions of reproduction.
After a very brief presentation of the capitalist offensive during the crisis, I will give a chronological account of the proletariat's struggles. As we shall see, right from the outset of the recession, survival was the main reason for the jobless proletarians' mobilization. Later on, the struggle shifted to the issues of wages and working conditions.
I / Capitalist offensive / rising unemployment / falling wages
The financial crisis erupted in October 1929. By the next years, joblessness skyrocketed (2.7 million more unemployed, according to official statistics). Four years later, the wave reached its peak (nearly 13 million unemployed). These figures give an idea of the mass of excess capital that had to be destroyed.
Unemployed (in millions)
% Civilian workforce
Wage index (1913=100)
Source: J. Néré, La Crise de 1929
Wages in fact declined more than the above figures suggest in that the latter concern nominal wages and do not count part-time work.
It is also worth mentioning a virtually unknown (and as yet unverified) fascist plot to overthrow the government. In 1934, a coup was planned with the intention of raising a private army of half a million men, composed largely of unemployed veterans. A government was to be formed modeled on Hitler/Mussolini policies. This was the brainchild, not of a handful of cranks, but of Wall Street financiers and major businessmen belonging to the most conservative right wing, who included the George W. Bush's grandfather, already known for his role in the business community's relations with Nazi Germany. The coup was discovered and nipped in the bud by Roosevelt.1
II / The various forms of proletarian resistance
The first struggles apparently focused on unemployment: demonstrations for benefits, hunger marches, looting, self-help groups, etc. Only later did the labor conflicts enter the arena, initially against pay cuts.
II-1 / Organization and struggles of unemployed workers
By early 1930, proletarians were forced by joblessness and the lack of unemployment insurance to resort to all sorts of expedients, oftentimes massive and in many cases organized. The Communist Party made a point of staying visible on this front.
February 11: The CP organized 3,000 unemployed workers to take over Cleveland's city hall. They were dispersed by the police. Comparable incidents in several other cities.
March 6: Declared by the CP "International Unemployment Day." Fighting in several cities.
July 1930: CP conference in Chicago to establish the National Council of Unemployed, with numerous local branches, which earned a reputation for resisting evictions of Blacks from their homes. These unemployed councils were totally unrelated to any kind of council-communist initiative.
March 1930: Spontaneous attack on two bakery delivery trucks in Manhattan. The attackers spied the trucks while waiting in a Salvation Army bread line. This is just one among many examples of "unemployment crime."
II-1-1 / Organized looting, hunger marches
Other initiatives were launched by unemployed workers in 1931.
Looting of stores on the rise. In July, 300 jobless marched on shopkeepers in Henryetta, Oklahoma to demand food, insisting they were not begging and threatening to use force if necessary. After several public figures intervened, the issue was settled without violence. By 1932, organized looting had become a nationwide phenomenon. Most often, shopkeepers tried to avoid the bad publicity of incidents by refusing to call the police.2
There were many hunger marches, most of them limited to a single city or region. In December 1931, the CP organized a March Against Hunger on Washington. Public statements by the CP (e.g., more than 1,100 trucks) and exaggerations by the police (Communist plot) contrast sharply with the actual event: 71 trucks and 1,600 marchers. Their main demand: unemployment insurance. This hunger march was far from the only one.
In January 1932, a populist priest, financed by small shopkeepers opposed to the supermarkets, led a march from Pennsylvania to Washington. The 12,000 marchers demanded relief measures, public works, and taxation of the wealthy.
In March 1932 came the Dearborn riots: The CP organized a march of 3,000 unemployed workers to the Ford plant at River Rouge. They demanded work for the jobless, payment of fifty percent of their wages, a 7-hour workday, a slowdown of the rate of production, no discrimination against Blacks, free healthcare, free coal, mortgages taken over by the company, $50 relief for the winter, etc. The police fired into the crowd, killing several demonstrators. Huge demonstration for the funeral, but no follow-up by the CP.
II-1-2 / Bonus Army
The most massive attempt by unemployed workers to gain attention was the great Bonus Army march.3 WWI veterans converged on Washington to demand early payment of bonuses promised by the government in 1924 for 1945. They failed.
The starting signal was a bill addressing the matter, which had no chance of passing. Nevertheless, debate over the bill prompted veterans to leave for Washington in support of the plan. At least in the beginning, there was apparently no nationwide organizer. The veterans went spontaneously, either alone, with their families or in a group. Many said they left because they had nothing else to do anyway where they were living. The first initiative originated in Oregon, where 300 men led by someone called Waters hopped on freight trains to go down in May 32. That led to brawls in Saint Louis, thereby attracting media attention that encouraged new groups to go. On their arrival in Washington, detachments of veterans set up camp near the center. At the peak of the movement (end of July 32), their number was estimated at 23,000. Their aim was to put pressure on Congress to sway the voting. They were very peaceful, highly disciplined, made few demands and hated the Communists, who tried to infiltrate their ranks.
The group from Oregon reached Washington on May 29. On the 31st, a formal organization was set up named the Bonus Expeditionary Force (BEF). Waters was its commander in chief and Glassford, the Washington police chief, was its Secretary and Treasurer. He was at the forefront in organizing encampments and requisitioning empty buildings to house the marchers. The largest was a makeshift settlement which sprung up like a shantytown on empty land in the suburb of Anacostia, facing the government district on the other side of the Potomac. The same Glassford went to great lengths to feed and care for the campers. The latter nevertheless set up their own team of stewards, who outlawed alcohol and weapons and blacklisted the Communists. The latter, naively unsuspecting, made every effort to gain control over the BEF. To no avail. When they went to Anacostia, anti-Communist sentiment was so violent that Glassford had to come to their rescue by slipping them out of the camp.
On June 17, the Senate rejected the bill for early bonus payment. Yet not only did the veterans stay their ground but their wives and children came to join them. The shantytowns grew. In July a bill was passed to loan the veterans $100,000 so they would go back home. That sum was an interest-free loan deductible from the bonus due in 1945. Some took the money, most with the intention of staying in Washington. That aroused growing opposition among politicians, who began to abandon Glassford.
On July 28, Glassford was forced to have the buildings occupied by the veterans evacuated. Without his knowledge, troops led by the future WWII heroes MacArthur, Eisenhower and Patton were sent in at the same time. The army evacuated and burnt all the occupied buildings, destroyed every encampment in the city center and repelled the veterans. Then it crossed the bridge to Anacostia, drove the occupants out of the shantytown and set it afire.
II-1-3 / Barter and other methods of survival
Meanwhile, unemployed people started banding together to organize their survival. They set up self-help centers to try and solve all the difficulties of surviving without a job.
In urban areas
The first self-help center, established in Seattle during the summer of 1931, was called the Unemployed Citizen’s League. From a membership of 12,000 at the end of 1931, its ranks grew rapidly, totaling 80,000 across Washington State a year later. The goal was threefold: self-help, relief, looking for jobs. The city was divided into twenty-two centers, each of which sent five members to a weekly central meeting. No fees were charged, and volunteer members handled the secretariat.
During the summer of 31, the League functioned fairly well, setting up barters, getting permission from farmers to glean potatoes or fruit in their fields, obtaining the loan of vehicles, or organizing women to exchange sewing for produce. By the winter of 31-32, things took a turn for the worse, and the League had to ask for funding from the municipality. It received $462,000. The League became the city's social welfare bureaucracy and was fairly efficient and cost-effective at that. An estimated third of the voters did, after all, belong to the League. After the city council elections, the new mayor regained control over the welfare administration and threatened to use arms against unemployed workers' demonstrations.
The winter of 32-33 was even more difficult than the previous one for the League, which was in decline by the time the Communist Party took it over.
During the same period, similar actions sprang up in California, where the mild climate was more conducive to farm work. A barter exchange was even created in Los Angeles, which issued scrip to pay people for what they brought in. Although the system quickly became unmanageable, one of the uses of the scrip was in bartering labor, which was unlawful and soon attacked by the trade unions. In early 1933, the Communists began infiltrating the Los Angeles movement.
The self-help movement spread from the West Coast to the rest of the country with the primary aim of organizing barter centers. Nevertheless, the movement's membership – 300,000 in all organized in 330 centers across 37 states – was modest compared with the total jobless population. Furthermore, the barter system soon fell victim to counterfeiters who fabricated fake scrip, as happened in Argentina during the 2001 crisis.
Return to the countryside
During the depression years, a clearly growing trend developed to return to the countryside, organized in some cases by Utopians (such as Ralph Borsodi) or out of nostalgia, but likewise supported by leading businessmen and the authorities. As early as 1931, public funds were granted to buy back small farms. I assume these grants were actually designed by the authorities to rid urban areas of unemployed workers, because farming during those years no doubt fared even worse than industry.
This phrase designates illegal extraction of coal. The practice, very widespread in the Pennsylvania mining country, consisted of a small group of men openly digging a hole in land belonging to the mining company. If all went well, it would take them between two weeks and two months to hit the seam. They would then remove the coal with ropes and buckets and sell it in full view. Many accidents occurred in those primitive mines.
In 1931, 'stolen' coal was estimated at no more than 500,000 tons. By 1933, it had blossomed into a small-scale industry, on which mining towns depended for their survival. Miners acquired trucks to go sell their coal in the city. This activity generated some fifteen to twenty thousand jobs, and 3500-5000 trucks were reportedly used. Estimated output in 1934 was five million tons.
The owners were apparently powerless to halt the phenomenon. The illegal mines that they dynamited were immediately replaced by new tunnels. And the authorities closed their eyes to these practices either to avoid worse happening or out of solidarity.
Bootleg mining was considered a form closely related to worker self-management, serving as a model for the future revolution. Mattick had praise for this experience which, according to him, showed that "all that is really necessary for the workers to do in order to end their miseries is to perform such simple things as to take where there is, without regard to established property principles… and to start to produce for themselves… The so-much bewailed absence of socialist ideology on the part of the workers really does not prevent the workers from acting quite anti-capitalistically, in accordance with their own needs. [The bootleg miners' action] is a manifestation of the most important part of class consciousness – namely that the problems of the workers can be solved only by themselves."4
II-2 / The three waves of strikes in the 30s
The statistics given above, though only indicative, show the three waves of strikes: in 1932, in 1934 and then from 1937 on. These three waves differ in nature and the first two alone genuinely reflect the workers' reaction to the outbreak of the 1929 crisis.
II-2-1 / 1932 – First wave of strikes
These were strikes against employers' attempts to cut wages.
Miners' strike in Illinois
In April 32, the United Mineworkers of America signed an agreement on wage reductions. The 150,000 strikers rejected it twice. Only 3,000 returned to work when the UMA confirmed the agreement. Armed threats against the strikers. The town of Franklin was declared off-limits. On August 22, 1932, 25,000 miners marched on the town. When they crossed city limits, the police fired, killing several people. The revolt gained ground. In the end, it became necessary to call in the National Guard, which terrorized the entire region.
Textile workers' strike in North Carolina
On July 18, 1932, several hundred workers in six hosiery plants in High Point went on strike against a twenty-five percent cut in the piece rate, the second reduction that year. The movement spread throughout the region. On the evening of the 19th, one hundred plants were shut down, in the furniture industry as well. The general strike began in Kernesville, Jamestown, Lexington, and Thomasville. On July 20, strikers at High Point attempted to enter a movie theater without paying. When they were refused entry, they proceeded to ransack the place. As the strike spread, the governor offered to arbitrate and succeeded in getting the pay cuts at High Point cancelled. The strikers returned to work gradually, the last on October 16. The movement was entirely spontaneous, without organizers from the Communist Party or any other group. It nonetheless led to the formation of the Industrial Association of High Point, an industrial type trade union which at the time claimed 4,000 members.5
II-2-2 / 1933 - The New Deal
The passage of the National Industrial Recovery Act paved the way for a Keynesian brand of economic stimulus. Section 7a of the Act, which recognized the employees' right to unionize in companies, resulted in workers flocking to the unions. They hoped that, with the help of Roosevelt, whose portrait hung in every worker's home, the unions would make employers yield on wages and the pace of work – two issues raised in many sectors. With the crisis, employers not only cut back on the workforce and working hours but increased the rate of production. The unions naturally opened their arms to the newcomers, sometimes trying to organize them along craft lines, unacceptable to the workers (Akron), but were not very militant on the workers' problems. A second wave of strikes, often wildcat, ensued.
II-2-2 / Second wave of strikes (1934)
The accounts of strikes that follow are those most often cited in works on the Depression. We can assume that they are fairly representative of a broader movement.
Longshoremen's strike on the West Coast6
After passage of the NIRA, and especially section 7a, workers joined the labor unions massively. Early in the summer of 1933, ninety-five percent of San Francisco's dockworkers belonged to the International Longshoremen's Association.
At the beginning of 1934, the ILA rank and file tried to force union leadership to challenge the "shape-up" system used by the bosses, a process they called the "slave market." Every morning, foremen would pick out those they wanted for the day. The longshoremen demanded that the system be replaced by union-run hiring. ILA bureaucrats were unsupportive. Members of the CP were active among the rank and file.
A proposed compromise between the bosses and ILA leadership was repudiated, and on May 9, 1934 longshoremen walked out in every West Coast port, cutting off nearly 2,000 miles of coastland. Strikebreaking would have seriously threatened the strike, but within four days the teamsters decided not to haul goods unloaded by strikebreakers. Other maritime workers (sailors, stewards, cooks, firemen, etc.) joined the movement. On May 21, the Joint Maritime Strike Committee was established, with five representatives from each of the unions involved. The strike, including pitched battles, lasted for weeks. Several attempts at mediation were booed down by the rank and file. On the evening of July 5, after a day of fighting, the governor called in the National Guard. The strikers returned to work.
The violence of the repression crystallized support for the idea of a general strike, which had been under discussion for weeks among the AFL unions (although opposed by San Francisco's AFL leadership). The general strike broke out in mid-July. Some 130,000 workers walked out, effectively crippling the life of the city. The AFL Central Labor Council assumed direction of the strike by establishing a General Strike Committee, which did its best to sabotage the rank-and-file initiatives. The general strike ended after four days, and the longshoremen capitulated on their most important demands (Brecher, Strike!, p. 150 fol.).
Minneapolis, Teamsters' strike
In early 1934, the union blocked sixty-five out of the city's sixty-seven coal yards to gain official recognition of the union. This was won in three days, and the union, organized on an industrial basis, recruited by the thousands. Trotskyists allegedly headed the union local.
Once recognized, the union sought to reach an agreement with the employers, who refused. On May 12, the union decided to call a strike. The city was blocked and transportation virtually paralyzed. The strike was very well organized, with its headquarters in a central garage, in constant phone contact with all of the pickets. At any given time, there were always at least 500 men at headquarters, ready to go help the pickets at any location around the city. One hundred-twenty cooks served up 10,000 meals a day at the garage, a medical team attended to the strikers, and a team of auto mechanics kept the strike committee's 100 vehicles in repair. The official strike committee consisted of one hundred rank-and-file teamsters. Assemblies were held nightly.
The employers counterattack, too, was very well organized around the Citizens' Alliance which had sought for twenty-five years to keep the unions outside the city.
There were open battles. The first, on May 21, was not decisive, but the second on the following day was undeniably a victory for the workers, who participated massively and kicked the cops out of the city. Work resumed even though nothing was settled, and each side prepared for a second offensive. On July 16 the second strike broke out, even better organized than in May and firmly supported by public opinion. On the 20th, the police provoked an incident and opened fire on the crowd. This triggered huge protest demonstrations. The governor declared martial law and called in the National Guard. But the pickets started up again with renewed vigor. The authorities, which had occupied the strike headquarters and arrested its leaders, were forced to back down and occupied instead the headquarters of the Citizens' Alliance. After a month of striking with the city at a standstill, the employers yielded.7
Auto-Lite, Toledo, April 34
The AFL organized a strike, with little success, at Auto-Lite, an auto parts plant. The remarkable fact was that the strike pickets, not very effective at keeping out scabs, gained the support of a jobless workers organization, the Lucas County Unemployed League, affiliated with Muste's American Workers Party. Management sought a court injunction prohibiting the mass pickets, but without effect. Within three days, the 1,000-strong picketers in front of the plant gates swelled to 6,000 workers and unemployed. The police then deputized a private security force (Toledo cops were no longer considered politically reliable) paid by Auto-Lite to arrest the pickets. The outcome was a seven-hour battle, during which the pickets broke into the plant three times before being repelled amid extremely violent fighting. At dawn the next day the National Guard arrived. But the workers and unemployed continued to fight the guardsmen, who ended up firing into the crowd, killing two people and wounding another fifteen. Auto-Lite finally recognized the labor union, granted pay increases and reinstated the strikers.
Textile strike, September 34
The industry addressed the crisis by shortening working hours and cutting wages. The United Textile Workers union openly collaborated. It isolated the first strike (Alabama, July 34). An industry-wide general strike finally broke out on September 3. Two days after 65,000 workers walked out in North Carolina, a total of 325,000 workers were on strike. The "flying squadrons," a tactic recognized as effective and widely used, were soon repudiated by UTW leadership. There were fifty squadrons in the Carolinas, in detachments of 200 to 650 strikers. They garrisoned the towns they moved through to ensure that the mills would stay closed. The governor of South Carolina soon had to call out the National Guard and declared martial law on September 9. Mill owners mobilized numerous special guards. An armed confrontation during which seven strikers were shot dead marked the beginning of the second phase of the strike. It became stronger organizationally and gained support from workers in other industries, despite the AFL leader's urging not to go out on strike. On September 11, 25,000 strikers shut down the town of Hazelton, Pennsylvania for twenty-four hours. The strike spread along the East Coast to New England, where strikers battled the National Guard. In Rhode Island, the rebellion reached such proportions (battle of Woonsocket, September 12) that the National Guard was overwhelmed. The governor called in federal troops. With the union leadership's approval, he declared that this was not a textile strike but a communist uprising.
On September 20, even as strikers continued to join the movement (421,000 at its peak), work resumed in some mills. The Board of Inquiry appointed by Roosevelt issued its report on the same day. Aside from calling on the strikers to terminate their strike, the board's members limited their recommendations to commissions that would study various aspects of the conflict. The Strike Committee hailed this as a victory and, on September 22, ordered the strikers back to work.
II-2-3 / Rise of the wildcat sit-down
Disillusioned workers flooded out of the unions. A new tactic appeared – the sitdown strike – which clearly finds its source in the mass-production workers' revolt. The expression is said to come from an incident at a baseball game. Players from two factories refused to play a scheduled game because the umpire was not a union man. They sat down on the diamond until the umpire was replaced.
A sitdown is a wildcat strike staged at the workplace. Often it is partial, short ("quickies") but highly disruptive of assembly-line work. This form of struggle appears to be specific to Ford-type mass production. At union leadership persuasion, the wildcat sitdowns were supplanted by plant occupations.
II-2-4 / Third wave of strikes: plant occupations in 1936-37
Firestone (Akron), January 1936
The truck tire builders sat down against a reduction in rates and the firing of a union committee member. The men had planned their action: when the hour struck, the worker closest to the master safety switch walked over and pulled the handle. Within a day, all workers at the plant were on strike, and the next day the second plant went out. Management capitulated.
Goodyear (Akron), February-March 1936
After several attempts, a sit-down strike broke out on February 14, 1936. The union marched the workers out of the plant. On the sixth day of the strike, the C.I.O. sent in delegates, and United Rubber Workers executives finally sanctioned the strike. Until then, everything had been done by the rank and file: they put pickets at the forty-five gates around the plant's eleven-mile perimeter; they elected their own strike coordination; and they set up a soup kitchen. In March, word spread that an attack was planned against the strikers. The union broadcast on the radio throughout the night to inform workers at home and tell them to be ready to rush wherever the attack occurred. A proposal for mediation by Roosevelt was rejected by the workers. After more than a month, Goodyear capitulated on almost all demands, although not on union recognition. Rebelliousness remained high in the plant after the return to work, with numerous quickies. This situation brings to mind the revolt of mass-production workers in the 60s.
Auto industry 1936-37
The same could be said of the atmosphere that prevailed in the auto industry, where production speed-ups were an ongoing grievance. The workers organized informally to cap output and resist employer pressure. As far back as 1934, tension began rising everywhere in the auto industry, and the workers flooded into the unions to push them to organize a strike. The AFL, however, stalled continually. Finally, the leading AFL official asked President Roosevelt to intervene and demand that the workers postpone the strike. Local representatives agreed to cancel it even though the compromise proposed by Roosevelt was actually a major defeat for the workers. They soon realized that they had been betrayed and left the union. What militants remained turned to the C.I.O.8 That was the starting point for the development of sitdowns in the auto industry, and the newly emerging C.I.O. alliance rode that wave of defiance to take root and win union recognition by the bosses. In late 1936, many strikes broke out in the auto industry, usually on rank-and-file initiative (whether unionized or not) and against the will of the UAW executives.
General Motors, November 18, 1936 – February 11, 19379
That was the background against which the great strike commenced at GM. For months, even the union locals were apparently not involved in the many sitdowns that occurred. However, in December 1936, the union turned the sitdown into a plant occupation. Summary of events:
Atlanta, Fisher Body plant, 11-18-36: one-night occupation of the plant.
Kansas City, 12-15-36: Occupation of the plant until 12-23 to protest the dismissal of a union employee. The union ended the occupation (but not the strike) due to difficulties in feeding the occupiers.
Cleveland, 12-28-36: strike on union rank-and-file initiative. Management demanded that the plant be evacuated. All but 259 employees (out of 7,200) left.
Flint, 12-30-36: The two Fisher Body plants (1,000 and 7,300 employees) shut down, the first spontaneously and the second on union initiative.
Other GM plants: Flint became the center of the strike, but thirteen of the corporation's other plants were also shut down over the following days, for varying lengths of time (S. Fine, p. 146).
The occupations were organized on a military model. Discipline, upkeep of equipment and premises, no alcohol, no women, entertainment. One assembly a day. The Flint cafeteria had a maximum of 2,000 meals to serve. However, since many non-occupying strikers also ate there, they should be taken into account to get an idea of the actual number of occupiers. In actual fact, roughly 450 strikers occupied Flint Fisher Body No. 2 plant on January 5 but only seventeen on January 26 (S. Fine, p. 168). "The problem faced by the sit-down organizations in Flint was not that of persuading strikers to leave the plants because it was difficult to feed them or because their talents were required on the outside but rather of keeping enough men inside to be able to hold the factories." (Fine, p. 168) Leaves were restricted, and a number of sitdowners were kept in the plants against their will. UAW members from other plants came to take part in the occupation. Articles were published in the local paper to explain to the wives that their husbands' presence in the factory was absolutely necessary.
Despite these difficulties, the occupiers successfully fended off an attempt by the police to force entry into FB2 on January 11, 1937. This was quickly dubbed the Battle of the Running Bulls. What motivated the police? Neither the governor nor GM management wanted the occupying strikers forcibly evicted.
The strike lasted forty-four days, at which point GM agreed to recognize and bargain with the unions in the occupied plants and promised not to deal with any other organization in them for six months. This 6-month monopoly enabled the UAW to consolidate its position in the corporation's plants. The head of the strike committee at FB1 remarked, "That ain't what we're striking for," and the men observed that there was nothing about the speed of the line.10 Nevertheless, work resumed.
III/ Short summary
Based on the above accounts, the proletariat's reaction to the crisis developed in several stages:
The first reaction was for jobless workers to organize and struggle for survival.
Only in 1932 do we begin to see strikes against pay cuts.
In 1934, a second wave of strikes combined demands for union recognition (authorized by the NIRA) and against pay cuts. The strikes won in certain key industries (automotive, transportation) and lost in others (textile).
In 1936-37, the third wave of strikes already signaled the emerging post-crisis era. These intense struggles against assembly-line work ushered in a new form of unionism, adapted to the Ford system of production, that was poised to prevail in all industrialized countries. As in France in 1968, the union, not the workers, gained most from the plant occupations. "Thus with the cooperation of the government, which created a rigid institutional framework for collective bargaining through the Wagner Act  and its National Labor Relations Board, the C.I.O. was able to channel the sitdown movement back into forms of organization which, far from challenging the power of the corporate rulers, actually reinforced their power over the workers themselves."11
It is also worth noting that, despite the workers' dynamic confrontations with the bosses, no group or ‘revolutionary' party was able to establish a lasting foothold. The proletariat's determination in defending its rights seems to have consistently stopped short of challenging authority, even at a local level. Illusions about Roosevelt were apparently pervasive, even though quite a lot of disillusionment was heard over the NIRA.
If my analysis of the three waves of strikes is relevant, it means that the undeniable energy of the proletariat's crisis action was devoted, at least in part, to union consolidation. The agenda of the American proletariat during the Great Depression of 1929 was arguably to gain union recognition by companies and impose unionism on an industrial basis.
B. Astarian (October 2008)
Translated by J Reuss
1 Alan Nasser, "FDR’s Response to the Plot to Overthrow Him," Counterpunch, October 3-5, 2008.
2 I. Bernstein, The Lean Years, p. 422
3 I. Bernstein, ibid, p. 437 fol.
4 Quoted by Howard Zinn, A People’s History of America, p. 386
5 About these two strikes, see I. Bernstein, The Lean Years, and J. Brecher, Strike!, p. 148
6 J. Brecher, op. cit. , p. 150 fol.
7 J. Brecher, op. cit., p. 160
8 At the time, the Committee for Industrial Organization was still part of the AFL.
9 The sources for what follows are: Jeremy Brecher, Strike!, Boston, 1972; and Sidney Fine, Sit Down, Ann Arbor, 1969.
10 J. Brecher, op. cit., p. 222.
11 Ibid., p. 216
China in Crisis: Reason to Panic?
In December 2008 the Financial Times spoke of an irony of history if the Communist Party of China (CPC), that had survived the collapse of the socialist Eastern Block in 1989 (and the social upheaval of Tian'anmen), would collapse through the events that come along with the global crisis of capitalism in 2009.1 Another commentator said, China's politicians, faced with a possible social explosion of workers, peasants and unemployed, were already in a "state of panic".2 But this is not just about China and the rule of the CPC. The question is whether the current crisis and subsequent social turnover can lead to the formation of a global working class that can finish off the capitalist mode of production world-wide. For any answer to that question class struggles in China play an important role.
China is still the biggest country in the world, with 1.3 billion people, and by now the third biggest economy. Through the opening and industrialization of the 1980s and 90s China became the "assembly line of the world", is part of global chains of production and circulation, and acts as a "global player" in investment and credit.
Over the past 20 years the immense process of industrialization has pulled millions of migrant workers from the countryside into the cities and special economic zones where they work in factories, on construction sites, as domestic helpers etc. After 2003 their struggles have gained momentum and put the regime of the communist party under pressure. The current global crisis is overturning the social relations in China again. The communist party is trying to deal with the effects. If it fails that might weaken and possibly decompose the regime and the rule of capital in China, with important consequences for the rest of the world.
This article describes the interrelation of crisis and class struggle in China in the past two decades and the current development. It focuses on the situation in the cities, especially that of the migrant workers.
Crisis and Struggles
The rise of China, the industrialization and the migration of millions to the cities are results of at least two processes of capitalist crisis and class struggle. After the cycle of struggles in the late 1960s and early 70s in the industrial centers of Europe, America and beyond, capital was looking for profitable investment opportunities world-wide. It invested in so-called newly industrializing countries where it exploited the "cheap" labor. Still in the 1980s, it was faced with successful workers' struggles for higher wages and better living conditions, for instance in Brazil and South Korea. In the early 1990s, capital was again searching for "cheap" labor, trying to escape the workers' struggles in the newly industrializing countries through another "spacial fix" (David Harvey).3 So China's migrant workers came along at the right moment.
At the same time, the Chinese regime was in a situation where it needed foreign capital: At the end of the 1980s China had seen a cycle of struggles.4 The urban working class had hardly benefited from the reforms of the early 1980s. The restructuring and intensification of work in the state combines, unemployment and inflation had hit it hard and produced resentment and strikes. In 1989 this culminated in the Tian'anmen-movement, started and lead by the students of Beijing, but supported and pushed by the anger of the urban population. Many Chinese cities saw revolts, demonstrations and some attempts to form independent workers organizations. The regime sent in the military to slaughter the movement. At the same time it realized that the reforms had not lead to substantial economic improvements and that further crises would lead to new social turmoil. Subsequently, after 1992 it further opened the borders for foreign investments and imports of technology, created new special economic zones, supported the private economy and subsidized the process of further industrialization. The urban working class, as well as the peasants and the new migrant workers, were held under police surveillance.5 From other regions, above all from the "Tiger states" and South East Asia, consumer goods industries were relocated to China. The construction of the "assembly line of the world" had begun.
From the mid-1990s up to the early part of this decade it was the struggles of the old urban working class that played the dominant role. Even during the industrialization of China's sunbelt, in the rustbelt of the old state industries masses of capital were wiped out and whole regions were thrown into one crisis after the other. The workers fought against the destruction of the socialist industrial combines and for their wages and social benefits – with strikes, company occupations and revolts. They could not stop the process but just slow it down: 50 million workers (40 percent) lost their job through the restructuring and mass redundancies. Many of them are part of the urban poor proletariat today.6
From the early 1990s on, the boom and the proletarianization of large parts of young people from the countryside led to the formation of a new working class of migrant workers. Their number increased constantly, today there are about 150 to 200 million. Because of the so-called household registration laws (hukou) they cannot settle down in the cities permanently and get only temporary residence and work permits for a city, a situation somehow similar to non-European migrants in the European Union. In this decade the second generation of migrants is pushing into the cities. They compare their own life with that of other urban dwellers and usually do not want to return to the countryside permanently (different from the first generation before). Since they see their future in the cities, they lease off or sell the piece of land they are entitled to farm in the village.7
From 2003 onwards, roughly 10 years after the beginning of the industrialization thrust, the number of struggles of migrant workers increased steadily, struggles against the horrendous working conditions, for improvements and higher wages, for their share of the fruits of the boom. The second generation organized petitions, rallies, strikes, slow-downs, demonstrations and riots. They put pressure on the foreign and Chinese factory bosses and gained higher wages in the export zones.
The symptoms of the current crisis (credit crunch, lower US-consumption, less orders, drop of world trade...) lead to lay-offs and social conflicts, and they interfere with developments that started earlier. After 2006 the increasing industrial wages, the high demand for energy, raw materials and food, as well as the slow appreciation of the Yuan in comparison to the US-Dollar produced substantial price increases – and therefore higher production costs and a profit squeeze. At the same time, discontent with low wages and later rising prices lead to a sharp increase of migrant workers' struggles. The government could do nothing but regularly increase the minimum wage. There were already first attempts of a new "spatial fix": Starting in 2007 more and more factories were closed or relocated – as a reaction to the rising costs and wages. For instance, parts of the textile and other consumer good industries went to the Chinese hinterland or to Vietnam (where the number of factory workers' struggles increased).
Meanwhile, the capitalists' systematic ignorance of the Chinese labor law increasingly threatened the legitimation of the CPC-regime. The Chinese central government has tried for years to defuse the social conflicts around the migration of workers, through direct state intervention during strikes, a system of grievance and mediation, through the flexible usage of the labor laws and the organization of migrant workers by the state unions. Since 2003 the government holds up the slogan of a "harmonious society" to mobilize workers and peasants for the construction of a "socialist market economy" – with little success: The situation of the workers is too precarious, their expectations too big, and many are not satisfied with getting the bread crumbs anymore.
The government introduced a new Labor Contract Law in January 2008, which complemented the 1995 Labor Law with some sanctioning mechanisms. When it was implemented Chinese and foreign companies in the low wage sectors laid off workers to prevent their permanent employment, others announced the closure and relocation of their factories. Many workers tried to use the new legal framework and demanded work contracts and wage rises. Activists from the Pearl River-Delta reported in early 2008 that there was an increase in conflicts around the new law.8
The Current Crisis
In summer 2008 people in China's ruling class still thought that the global crisis would not hit their country and the Chinese economy would have enough of its own dynamic thrust and could stay unaffected from the slump in the USA.9 Paradoxically, after the first culmination of the crisis Western apologists of capital counted on the "Chinese solution", too, i.e. the usage of China's currency reserves and the power of the Chinese economic miracle. The dream of China's own dynamic burst, and the hopes in the West on China (and the other BRIC-states Brazil, Russia and India) dashed quickly. The high export quota of the Chinese manufacturing sector – with the EU, USA, Japan and the "Tiger states" as the main trade partners – makes the Chinese economy crisis-prone.10 That was confirmed in the fall of 2008: drop of economic growth, drop of the growth of manufacturing, decline of exports, decline of investments, decline of energy consumption, decline of state revenue. All that after 15 years of boom with annual growth rates of 10 percent on average.11 Since Japan, South Korea, Taiwan, Hong Kong, Singapore and Vietnam are also hit by the crisis, the trade between those countries collapsed. Furthermore, still in fall 2008, China's real estate bubble burst as well.
Within the CPC there is no consistent position on the crisis. Repeatedly conflicts arose between those who want to use the crisis to modernize the economy, at the risk of new social turmoil (the governments of the rich provinces like Guangdong and Shanghai) and those who want to protect the China-model (export factories for cheap consumer goods), hoping that the social situation will stay calm (the central government).12 When in the fall of 2008 the symptoms of crisis became more visible, some saw that as a chance: The provincial government of Guangdong talked about the possible closure of weak and small firms in the course of the crisis which would support the process of restructuring and upgrading of industries in the Pearl River-delta. The Guangdong government wants a further outward relocation of the production of cheap consumer goods and the extension of hi-tech and capital goods industries in the region.13
The threat of company closures and relocations, complaints of managers about high wages and the new Labor Contract Law, all that started before the global crisis hit (see above). Now capitalists use the crisis – whether it affects them or not. They lower the wages, close factories or relocate them, cash in state subsidies and enforce labor conditions below the legal standard.14 A representative of the employers association of Guangzhou demanded that the central government helps small and medium-sized firms to survive the recession by introducing less rigorous rules. He talked about the slackening of the labor laws.15 And in fact, in January 2009 industrialists reported that the compliance with the 2008 Labor Contract Law was hardly controlled nor was it enforced.16 A labor activist said that the government wants factories to survive and stay, and that is why they ignore the problems at the workplaces.17
The regime has prohibited a further increase of the minimum wage by the regional governments in 2009. It wants to prevent further wage hikes (after years of considerable increases). Many big companies have already announced wage cuts, with government consent. At the end of January a government speaker said that the Chinese companies should do everything to avoid lay-offs.18
In November 2008 activists and migrant workers in the Pearl River-Delta spoke about underemployment and lay-offs, especially in the textile and toy sector.19 Workers with limited contracts were fired, core workforces were kept but could not work overtime and often did not have regular working hours. Some were asked to take unlimited and unpaid vacation.20
There are no reliable numbers on the extent of redundancies and the return migration of workers to the countryside. In November 2008 some provinces were preparing for waves of returnees (Hubei, Chongqing, Anhui), but officials in Guangdong denied that there was such wave. Some migrants were returning to the countryside – a number of 5 to 10 percent of all migrant workers was mentioned. In mid-January 2009 the Ministry of Labor announced that 10 million migrant workers had lost their jobs, in early February the number was raised to 20 million.21
While in late summer 2008 the crisis started to unfold, further struggles broke out. The actions of taxi drivers and teachers were interesting because struggles in one province provoked other conflicts in different parts of the country (copycat-effect). At the end of 2008 and the beginning of 2009 there were workers' rallies and riots in the industrial export zones in the Pearl River- and Yangtze-delta. The conflicts had changed in comparison to the events before: They were not so much about wage increases, better conditions in the dormitories, compliance with the labor laws, better canteen food etc., but more than before about the payment of back-wages and compensations for lay-offs. The construction sector also saw demonstrations.22 Witnesses confirm that from the fall of 2008 on there were more labor conflicts than before. Even a representative of the state union ACFTU admitted that the number of labor struggles in China had increased with the global financial crisis. Still, there are no exact and reliable numbers.23
In the face of a possible economic collapse and social explosion the regime of the CPC had to react again. China has a long history of similar situations: During crisis rulers were kicked off the throne by social (peasant-) movements, especially when the movements joined forces with intellectuals and civil servants. Now the rule of the CPC is threatening to go under in the current crisis.
Internally, in China, the regime acts as if it was still in control of the situation. It describes the crisis as temporary, it says it will last for half a year. Unemployment and other results of the crisis threaten "social stability" and the government would take the right economic and police measures. Reports on concrete cases of labor struggles are further censored or repressed.24
Externally, towards the outside world, reports on possible unrest of unemployed migrant workers are indeed in the interest of the government. Social turmoil in China is a nightmare for the ruling classes elsewhere, too. The Chinese government uses this threat when the US-government or others demand a drastic appreciation of the Yuan.
In order to prevent a further spread of struggles the state has in recent weeks directly intervened in industrial conflicts on back wages and compensations and paid the money itself. Many cities and industrial zones have set up special funds to save companies on the verge of bankruptcy, avoid redundancies and pay off back wages. In some cities migrant workers get financial support if they leave the city. The state pumps 4 billion yuan (500 billion Euros, 15 percent of China's GDP) in form of a stimulus program into infrastructure projects and residential construction to prevent the collapse of the construction sector, curb the unemployment and stop a further drop of economic growth.25 A growth rate of 8 percent a year is necessary to create enough employment for those people who are pushed into the labor market by population growth and migration from the villages into the cities. A growth rate below 6 percent is seen as critical.26 At the end of January 2009 the government announced it will introduce comprehensive medical care in 2011, with a funding of 850 billion yuan (about 100 billion Euros), again to defuse social explosions. Originally this was planned to happen in 2020.
The regime tries to buy time. It wants to protract the worsening of the crisis and, if possible, ensure a "soft landing". This is also to prevent a further deterioration of the situation of the migrant workers in the cities. A large part of them, especially in the factories and in construction, lives in dormitories owned by the companies and eats in company canteens. In case of mass redundancies these workers do not just lose their job but also their accommodation and catering. In mid-February, around the Chinese New Year, many migrant workers returned home for the festivities as every year. It is still unclear how things develop after their return. According to some reports many have difficulties in finding jobs, and wages have dropped.27 Some companies have returned to daily wages and day laborers.28 If the crisis continues and they do not find work in the cities they will realize that the boom is over and their lives will change dramatically. There are two scenarios:
a) The second generation of migrant workers does not want to live in the countryside anymore, or at least does not see its future there. So they could stay in the cities and, if unemployed, would have to search for alternatives for getting an income, accommodation and food, and possibly fight for and appropriate it. In many big cities they account for 30 to 80 percent of the population. Is there a chance for them to join forces with millions of urban poor who survive on petty trade and petty jobs?
b) The migrant workers could migrate back to their families in the villages where they still have the right to farm a piece of land. Maybe they will manage to get by with the money they saved, but without an urban wage the families will sooner or later run into financial problems. There are no jobs, no perspective, poverty and boredom.29 In the past few years the countryside has seen many revolts against corrupt cadres, land dispossessions and environmental contamination. Even now in many regions the small plots are not big enough to feed a whole family, and there is still a rural labor surplus. The planned state subsidies for education, school fees and the setting up of businesses will not change much. If the migrant workers return to the countryside in masses – a temporary reversal of 30 years of urbanization – that would create an explosive mix.30
Many experts foresee a recession in China with a growth rate of 5 to 7 percent, below the "critical" level. China might also see a wave of factory closures. One third of all export factories are expected to close in the next 3 years. An observer estimates that the number of unemployed migrant workers could reach 50 million this year. They are younger and more mobile than the urban workers who were laid off by the state combines at the end of the 90s, and they can communicate better and faster through the Internet and cell phones. Furthermore, he pointed to the millions of students leaving the universities every year without finding a job and referred to a similar situation before the Tian'anmen-movement in 1989, when the students played a central role (this year will be the 20th anniversary.) As a possible fuse for a social explosion he mentions "the death of a popular leader, a serious natural disaster, the spread of a deathly infectious disease, a small student demonstration turned violent, religious groups...". A scenario as in Greece at the end of 2008 when the cops shot a young guy and triggered off days of massive rioting?31
For sure the crisis took the migrant workers in China by surprise since before they had not experienced long phases of unemployment and recession. But in recent years they have gained experience in struggles, in everyday forms of resistance, strikes, and self-organizing. Activists from their ranks have come up, spreading these experiences and using it in new struggles. They know the complicity of capitalists and cadres, the confrontation with security guards and riot cops. The migrant workers make their demands, often in a self-confident manner. They take their experiences with them, it will be part of the formation of a new social composition that comes with the crisis.
A decisive factor will be what China's "middle class" will do. It constitutes the main social pillar for the CPC-rule, but was already hit by the crisis since it lost a lot of money through the crashes of the stock market and the real estate market. Many of its children finish university and do not find a job. There were already actions of unhappy shareholders and shop owners. Can "middle-class" conflicts come together with proletarian of peasant struggles (as in Argentina 2002)? The government emphasizes the threat of "social instability" through unemployed migrant workers and whips up the intellectuals' and the "middle class'" fear of the "mob", in order to prevent a possible alliance.32
The regime still tries to avoid any blood-shed. During conflicts in the Pearl River-delta in December 2008 the police stayed back, made photos and arrested some participantsafterwards.33 It is the old game: The CPC makes sure that some demands are fulfilled and arrests the alleged "ring leaders". As long as the struggles stay isolated, that strategy might work. In case of a wave of unrest, the regime will have to change its course.34
Parts of the left in Europe, the USA and elsewhere project their hopes on the new working class in China and see the conflicts in the fall of 2008 and later as the harbinger of a new broad class movement. We cannot foresee the dimension and importance of the coming struggles in China. The workers are still in the course of understanding the situation and trying to deal with it. There is a chance that mass redundancies in industrial zones and crisis slumps in rural areas will lead to mass revolts, but it is also possible that the rural subsistence economy together with the migrants' savings will cushion the impact of the crisis... at least for some time.
A social escalation in the export zones would have global effects, not only in the old industrial countries. Chinas cheap consumer goods were one precondition for the casualization of big numbers of workers, since that casualization could be carried out without a dramatic drop in the standard of living. The crisis, the collapse of international trade and the struggles of the workers in China could now bring about a lowering of the standard of living and an aggravation of the social situation to many countries of the world... and an increase in working class struggles there.
Central sectors like the auto industry, the chemical industry and machine-building have heavily invested in China and are closely connected to the Chinese economy through global production chains. In case of struggles in China the impact will be felt in those industrial sectors, with further attacks on the conditions and wages of workers and possibly mass redundancies.
And finally, if the economic framework between the USA and China ("Bretton Woods II")35 – backbone and Achilles' heel of the global economic and monetary structure – will collapse due to the credit crisis and the decline in US-consumption or because of workers' struggles in China, then we might see global dislocations which go far beyond what we have seen so far: breakdown of the Dollar and the global currency system, bankruptcy of the hegemonic power USA, long-term collapse of world trade, increasing military confrontations and more.
What Is To Be Done?
We should follow the developments in China in order to understand them and add the experiences to debates of new class movements elsewhere. We need to identify and underline the global context of crisis and struggles. Furthermore, we need to undermine bourgeois interpretations of crisis and nationalist tendencies. Strategies of fear (of crisis) are already being used to prepare us for the further tightening of our belts. We are told to be afraid of strangers and foreigners, like the "cheap Chinese who steal our jobs and are responsible for the price hikes". We have to emphasize the chances for social change that arise in the crisis and the struggles, and the importance of a common learning process of proletarians around the world. The circulation of struggles and the appearance of social networks can contribute to the formation of a working class on a global level. We still seem to be quite far away – so wide are the differences of living conditions world-wide – but this is the right direction if we want to finish off capitalism, in China and everywhere: Only a global class movement has the power to break the capitalist logic of crisis and create a new society based on solidarity not profit.
March 8, 2009
1 Financial Times, December 16, 2008
2 International Herald Tribune, January 23, 2009
3 The "spacial fix" also seems the result of "inner-capitalist" competition, as Robert Brenner and others interpret it. But behind this competition lies the common interest of capitalists to intensify the conditions of exploitation and move to those regions which are most favorable to capital. As a trigger for the current crisis the "financial fix" plays a decisive role, too, the increasing financialization of capital since the 1970s, again a reaction to the lack of profitable investment opportunities in productive sectors.
4 The origins of the changes in China since the 1970s are complex: the social and political chaos of the Cultural Revolution, poverty and discontent among peasants and later urban workers, the removal of ideological Maoists by a layer of pragmatic party leaders, the social conflicts of the 1980s with their culmination during the Tian'anmen-movement 1989, the determination of the regime to prevent a collapse as in the Soviet Union, etc.
5 At the same time a reshaping of the social relations started, which was necessary with the dismantlement of the state combines. Part of it was the juridification of labor relations (union law, labor law, etc.).
6 See the supplement of the German magazine wildcat ("Unrest in China"). Three articles are available in English at prol-position.net: http://www.prol-position.net/nl/2008/10/chinas%20migrant%20workers (on migrant workers), http://www.prol-position.net/nl/2008/10/unhappy%20workers (on urban state workers) andhttp://www.prol-position.net/nl/2008/10/maoist%20patriarchy (on urban women workers). For the whole supplement (in German) see:http://www.gongchao.org/de/unruhen-heft.
7 This was "legalized" by the government in October 2008. It announced that the leasing and passing on of land rights would be allowed. This development seems to carry high risks since many migrant workers without land rights will have no chance to live off the land when unemployed of deported from the cities.
8 The Ministry of Labor and Social Security revealed that in the first six months of 2008 arbitrated labor disputes increased by 145 percent in Chongqing and 92.5 percent in Shanghai (Nanfang Zhoumo, July 31, 2008). In the same period, courts in Guangdong province received nearly 40,000 new labor dispute cases, a 157.7 percent increase from 2007, in which the Pearl River-delta area accounted for 96.5 percent of all cases ( China Daily, July 22, 2008, www.chinadaily.com.cn/china/2008-07/22/content_6865144.htm). Between January and September 2008, labor arbitration departments in Beijing handled 32,954 labor disputes, up 104 percent from the same period in 2007 (see Beijing Review, January 20, 2009, www.bjreview.com.cn/nation/txt/2009-01/20/content_175296.htm).
9 Financial Times, December 16, 2008. That is astonishing since China's economic relations with the USA follow a pattern that is sometimes called "Bretton Woods II". It is a key element of the current crisis: Customers in the USA buy goods from Chinese companies and pay with US-Dollars which the sellers store in Chinese bank accounts. The banks pass the US-Dollars on to the Chinese central bank, which then uses the US-Dollars to buy US-American state bonds. After that the US-Dollars are passed on through the American bank system and end up as credits to American households. They use them to buy Chinese goods, etc. The result is an extreme current account surplus of China (exporting more than importing) and an extreme current account deficit of the USA (importing more than exporting). In other words: China produces much more than it consumes and the USA consumes much more than it produces... and the USA pays its consumption with money they have given China for its goods and then gotten back as credit.
10 The exports represent 40 percent of China's GDP, the export surplus is 12 percent (after 2 percent some years ago);http://cnreviews.com/china_economy/china_financial_crisis_20081125.html)
11 With a small dent during the Asian Crisis 1997/8. China got through that crisis nearly unharmed, because the Yuan was (and is) not convertible, because of a state stimulus program, and because China took advantage of the crisis of other Asian states.
12 Die Zeit writes about a conflict between the central government and the bosses of the provinces of Guangdong and Shanghai who opposed any state subsidies for the textile, toy and electronic industries (Die Zeit, February 5, 2009).
13 See: www.iht.com/articles/ap/2008/10/20/business/AS-China-Factory-Woes.php
14 See Staphany Wong: Impacts of the Financial Crisis on Labour Conditions in China, December 19, 2009, www.eu-china.net
15 China Daily, November 11, 2008, www.chinadaily.com.cn/cndy/2008-11/11/content_7191436.htm
16 CSMonitor.com, January 28, 2009, www.csmonitor.com/2009/0128/p04s01-woap.htm. See also: http://www.ihlo.org/LRC/WC/010309.html
17 The Straits Times, January 20, 2009
18 The Straits Times, January 20, 2009
19 See also South China Morning Post, November 17, 2008. Again, there are overlapping processes: The toy sector was hit by scandals around the usage of toxic materials, the textile sector saw the relocation of factories to Vietnam (see also China Labour Bulletin: Migrant workers worst hit by textile factory slowdown,www.clb.org.hk/en/node/100322).
20 Source: Talks with workers in China. Managers force workers to take "vacation", instead of firing them, because they expect workers to take a leave themselves which would save the company the compensation payment.
21 The number of unemployed in the cities has increased as well. Officially it is around 4.2 percent, but the Chinese Academy of Social Sciences sees it around 9.4 percent (The Straits Times, January 20, 2009). That includes just people with an urban hukou (no migrant workers). Unemployment on the countryside is estimated to be around 20 percent (Washington Post, January 13, 2009, www.washingtonpost.com/wp-dyn/content/article/2009/01/12/AR2009011203014.html)
22 An example: http://uk.reuters.com/article/latestCrisis/idUKPEK226188
23 Chinacsr.com, January 13, 2009, www.chinacsr.com/en/2009/01/13/4173-acftu-campaigns-for-chinese-workers-back-pay/ The government has stopped to regularly publish the numbers of social unrest some years ago.
24 The Sunday Times wrote on February 1, 2009, that in Linfen, Shanxi, TV-journalists were sacked after they tried to report on a factory occupation of 6,000 textile workers:http://business.timesonline.co.uk/tol/business/economics/article5627687.ece.
25 Two thirds of that sum have to be raised by provinces and municipalities, but they could have problems raising that much money (International Herald Tribune, January 23, 2009, www.iht.com/articles/2009/01/22/business/yuan.2-413647.php). Since most of that money goes to infrastructure and other construction projects the crisis of the export sector will not be eased. For the substitution of the ailing US-consumption through higher exports to other countries (EU) and a bigger domestic demand, the government has to come up with other ideas. In contrary to the USA, China has the means for this stimulus program: China (still) has little debt, a low budget deficit and huge currency reserves.
26 Just one year ago there were complaints that the Chinese economy would overheat with a growth rate of more than 10 percent annually, and it was said that it should be reduced to a "reasonable" rate: 7 or 8 percent were named as a good target.
27 Reuters, February 20, 2009: http://sg.news.yahoo.com/rtrs/20090220/tap-oukwd-uk-china-workers-03b3b4c.html
28 See http://www.ihlo.org/LRC/WC/010309.html
29 According to the government the urban income is 3.4 percent higher than the rural income. Ecological damage, droughts, storms, dispossessions and evictions further aggravate the conditions on the countryside.
30 It will be crucial whether the new land laws will – following the intention of the government – lead to a concentration process in agriculture and whether the landless rural population will grow.
31 Victor Shih on rgemonitor.com, January 9, 2009, www.rgemonitor.com/asia-monitor/255032/will_job_losses_lead_to_social_unrest_my_take We might also see a situation as in Tibet in March 2008 when the discrimination and (political and cultural) repression of Tibetans, combined with social factors, lead to riots that lasted for days.
32 That is somehow a continuation of the racist propaganda of the 1990s when migrant workers were presented as naive hillbillies, responsible for anything from criminality to diseases and the moral decadence in the cities.
33 The Observer, January 25, 2009, www.guardian.co.uk/world/2009/jan/25/china-globaleconomy
34 The suppression of political dissent and resistance – which is most often separated from workers struggles – has increased in recent years. With the current crisis and social escalation it is hard to expect that the regime will relax the shackles. An extension of the local elections, as it was planned in Shenzhen, was canceled. A party official said: "If we had an election right now, we might end up like Thailand." (New York Times, December 19, 2009, ww.nytimes.com/2008/12/19/world/asia/19china.html). He referred to the conflict between two party camps about state power in Thailand at the end of 2008 which lead to the blockade of the airports of Bangkok.
35 The growth of the Chinese currency reserves has slowed down, but there is no clear drop in the purchase of US state bonds so far. China's exports dropped, but there was an even bigger drop in imports (rgemonitor.com, January 16, 2009,www.rgemonitor.com/asia-monitor/255114/secrets_of_safe_a_sharp_slowdown_in_reserve_growth_and_large_hot_outflows_in_q4).
Reports on Crisis
We asked people in several countries to write down observations about social effects of the crisis.
The following is a report from England, written in January 2009, updated in February 2009
On January 8 Nissan sacked 1,200 of the 5,000 workers at its
Sunderland car plant (Wearside, North-East England). Some reports said
800 permanent and 400 temp and 800 'permanent' jobs would go, others
that it would be 'mostly' temp jobs. The Nissan plant, which began
cutting production and hours in October, had introduced round-the-clock
shifts to meet demand in January 2008; it was 'widely regarded as the
most efficient in Europe' (Financial Times), and had
supposedly 'revitalized' local business (Nissan's own supply chain,
where at least another 5,000 workers are now threatened, plus
petrochemicals, paper and 'high quality' call centres) through the
example of its kaizen/'lean production' model. The case was
the most prominent in the UK so far of mass layoffs by a profitable and
solvent 'lean' employer. In a sense Sunderland is unusual among the
parts of Britain affected by industrial shutdown in the 1980s, in that
the 'replacement' for the shipyards and coal mines involved at least an
element of new (i.e. downsized and 'flexible') manufacturing. Outside
its reindustrialized outposts, though, Sunderland, along with other
historically working class parts of the country (including much of
London, eg. ex-Ford Dagenham and pre-Olympic Hackney/Tower Hamlets),
has experienced the same things more or less uninterruptedly throughout
the financial/services boom: persistently high unemployment, state and
EU-funded 'urban regeneration' projects bestowing a few fragile retail
and hospitality jobs along with real estate gains and 'creative' fees
for a micro-minority, and prodigious growth of government agencies
administering 'social exclusion'. The Nissan layoffs show that 'social
exclusion' is something no-one is safe from now, to the point that the
term loses whatever meaning it ever had. Behind all the state agencies'
efforts to pathologize it, 'exclusion' essentially means having no
realistic individual hope of 'prospering' individually as a rentier, a
business-owner or a professional in a financialized economy. This
hopelessness is clearly no longer exclusive : it can happen
to anyone (it always could have done, but until recently 'anyone'
wouldn't have believed it), and it is happening on an enormous scale
right now. The near future of class conflict will depend on the
reaction of those workers who find themselves flung into this
condition, together with that of those have never known anything else.
The nature of the crisis in the UK follows directly from that of
the16-year 'boom' that preceded it. The role of rising financial asset
prices (i.e. expanding claims on value produced elsewhere or
in the future) as the 'engine of growth' was not just a matter of the
portion of 'GDP' attributed directly to financial services (officially
33 per cent in 2006): this hypothetical revenue, i.e. credit, flowed
into the much larger business and consumer services market, paying
almost incidentally for the low-wage, quick hiring/firing jobs of the
local 'employment boom'. In this context, 'wealth creation' in the UK
was not primarily dependent on surplus value from labour in the
'services boom' jobs. Rather, claims on flows of value from elsewhere
in the globalized economy, refracted and magnified through 'complex
financial instruments', flooded the economy, temporarily funding
something like a giant job-creation scheme (or workhouse). The
meagerness of real wages from the jobs 'created' this way forced those
workers with access to mortgage or consumer credit into systematic
dependence on it. (Meanwhile of course, for many others, state benefits
and/or high-risk income from the 'criminal' economy remained the only
options.) Of course these phenomena were by no means unique to the UK,
but the precocious development of the system in this country, the
unusual dependence of 'national' and household incomes on the
bidding-up of financial assets, corresponds to the relative seriousness
of the crisis here .
The role of the state in supplementing 'employment growth' through
the financial boom in this most deregulated or 'Anglo-Saxon' of
economies may be less well known. On November 23 the FT
reported that two thirds of the jobs created between 1998 and 2006
'would be classified by most people as being in the public sector'.
State employment rates were significantly higher among women and in the
regions hardest hit by manufacturing job losses over the last 30 years,
with the North-East at the top of the list. As the Daily Mail
commented, "the government has based agencies and set up Quangos such
as One North East in the region to tackle unemployment caused by the
decline of traditional industries such as coal mining". Which is to
say, it's not just a matter of adding to overall job numbers: many of
the jobs are directly concerned with processing and policing the
unemployed, or otherwise administering coercive 'care' to a disorderly
low-income class. The 'public sector' designation here does NOT mean
the workers are directly employed by the state, with protected wages,
conditions and pensions. The 'public sector' has been drastically
overhauled over the last 10 years under the Private Finance Initiative
(PFI) system, which installs private contractors (actually often chains
of contractors, with one hiring another for each particular function)
as 'service providers' in the medical, welfare, transport, housing,
education, waste disposal, policing/courts, immigration control and
military sectors. The contractors put up the initial capital, which
they borrow privately, and they hire employees on typically 'flexible'
private sector terms. The state contracts to pay the money back over
several decades, thereby indebting itself more than it would otherwise,
but keeping public borrowing and spending officially off the books ,
as well as avoiding responsibility for the workers and for any damage
done to infrastructure or 'service users'. This arrangement means the
myth of relatively safe 'public sector' jobs is likely to disappear
quickly, along with a lot of existing 'public services', as the PFI
contractors struggle to refinance their private debt. It was reported
on January 14 that contractors have failed to raise the initial money
for major projects in the last year, with the number of new PFI deals
almost halved. On the same day Deloitte published a report calling the
crisis an opportunity for 'radical transformation' of the public sector
in a 'market-savvy' direction.
Thus the whole configuration of the deindustrialized 'boom' economy,
which detached returns on capital from labour income, making the whole
edifice dependent on complex financial claims, now ensures that neither
profitable manufacturing nor the 'state sector' is any refuge from the
crisis. So far there has been almost no sign of a confrontational class
response to the crisis as such, either through strikes rioting of the kind seen in Greece and Latvia or even symbolic protest through the 'official channels' .
Unions volunteered for wage cuts to save jobs at JCB and Corus; JCB
accepted the offer then sacked the workers anyway. This kind of fear
and demoralization surely has something to do with average household
debt of £9,600 excluding and £59,670 including mortgages, with the
total amount just above GDP at £1,456 billion.
Private capital (apart from banks) has so far deflected hostility by
pleading helplessness . In the meantime the state has been asserting
itself along all the lines of class confrontation, acting as planner,
financier, 'employer' and unemployment/'exclusion' manager. The
government's approach to imminent mass unemployment amounts to a
buildup of outright war on the unemployed, with new legislation to be
passed in spring, pilot programmes in 'socially excluded' areas  before the legislation, and full implementation in 2010-11. 
Private and 'voluntary' sector dole policing and the attack on
incapacity benefit, which absorbed hundreds of thousands of unemployed
during earlier attacks on the dole ,
are longstanding but until now slow-moving policies. The decision to
legislate now, so that the new regime comes into force over the next
two or three years, may indicate state planners' idea of the time-frame
for the arrival of depression-level unemployment. This timing ensures
that full implementation of the new dole policy will more or less
coincide with generalized 'austerity' (i.e. shutdown of state-funded
reproduction services, users charges for those remaining, regressive
taxes), as required by the Treasury insistence that the recent bailout
borrowing and deficit spending should have zero fiscal impact in
absolute terms, with the budget to be fully balanced again by 2015-16.
All this raises the question: what kind of 'strategy', if any, could
be underlying an all-round attack on real wages and the unemployed
during a recession in which circulation is atrophied and there is no
work available to impose? Is the argument of George Caffentzis and
Silvia Federici that the 'Western' proletariat is being prepared for
'Structural Adjustment' applicable, given the difference between (in
the case of the UK) a bankrupt ex-industrial economy and those where
agricultural/mineral-exporting debt peonage was imposed before full
proletarianization ever took place? In this respect the term
'Structural Adjustment' may not fit, but certain capitalists and their
intellectuals have been demanding for a long time that the expectations
of 'Western' proletarians should 'catch down' with those of the
What kind of class response can be envisaged, then, if mass
unemployment, semi-employment and pressure on the wages of those still
employed throw large numbers of workers into the condition known until
recently as 'social exclusion'? In the present context of fear and
retreat, this can only be considered the future tense (near as that
future may be), or in the form of very open questions.
A crucial general factor must be the development or otherwise of
some kind of solidarity between the newly 'excluded' and the so-called
'underclass' already in that position. Closely related to this question
is that of the relation between 'permanent' and temp workers. Also, any
emerging sense of common interest will have to deal with complex forms
of individual and micro-communitarian competition existing on both
sides of the line between the (former) 'respectable working class' and
the (perpetually) 'socially excluded'. For instance, will shared
material experience tend to dissolve or exacerbate animosity around
immigration (or the hallucinatory 'common sense' idea of it) and
'ethnic identity'? Could the willingness of many proletarians to fight
the state as well as each other over 'race' issues conceivably be
turned into class hostility as more people find themselves in the same
position across 'ethnic' lines, or must it be manipulated by state,
media and 'community leaders' into intra-class sectarian disaster?
More broadly, will drastic change in material conditions be enough
to undo a deeply ingrained ideological-cultural assumption that
'getting out' (as in 'out of the ghetto') or 'moving up' individually
and competitively (whether as a business owner or a professional) is
the only rational aspiration for proletarians? This assumption has been
strengthened over decades by real factors: the withdrawal of the basis
for survival for the 'working poor', eg. , state pension; relentless
official emphasis on 'training' and 'personal development' as the
solution to all problems ; disappearance from collective memory of any instance of material improvement on a collective basis.
If the stakes and complications of any near-future class
confrontation can be conceived this way, perhaps it's possible, even
more tentatively, to imagine some factors which might contribute to its
New unemployment on a massive scale, coinciding with the
introduction of the most punitive dole regime ever. Dole offices are
already fraught, violent places; what will the arrival of
thousands/millions of workers unused to such humiliation mean?
Opportunistic employers seizing on the crisis as the chance to
finish off long-running labour disputes and recalcitrant workforces. Of
course this could also just mean quick capitulation by the blackmailed
workers, but might a strike like last year's at the Post Office be
taken further in the absence of the illusion of anything to lose?
New redundancies, wage and benefit cuts and shutdown of basic
services in areas where strong collective memory of struggle over
similar things during or since deindustrialization exists, eg. the
North-East (miners' strike, 1984-85), Liverpool (dockers' strike,
Ever-increasing regulation and policing of social reproduction
(biometric ID database, Anti-Social Behaviour Orders, state
intervention in parent-child relations, etc). This is presented by
middle-class campaigners as a 'civil liberties issue', but it really
has more to do with attacking the semi-legal or illegal means of
survival of the 'socially excluded': 'benefit fraud', informal labour,
small-scale drug trade etc. Policing of these things has been used
quite successfully so far to provoke division between the 'respectable'
mostly-working class and the so-called 'sub-proletariat'. But will it
still work this way if a lot more people suddenly find themselves
depending on these 'grey markets', or officially 'anti-social' forms of
social collaboration, in order to survive?
Based on what I can see right now I'm
quite pessimistic in the immediate term, but this doesn't necessarily apply at all to the situation in a year's time.
class confrontation that looks like a damp squib from the proletarian
side at one moment might become explosive not long afterwards as
'objective' conditions come to be experienced 'subjectively' in a more
At the end of January collective anger and its contradictions burst
out in wildcat strikes across the energy industry. At the Lindsey Total
oil refinery, workers struck against the EU-mandated decision of
Sicilian sub-sub-contractor IREM to supply 'its own' Italian and
Portuguese workers for construction jobs not advertised locally. This
action in support of the unemployed would already have been 'illegal'
as a 'political' strike, but the Lindsey workers were joined by others
at 11 sites UK-wide in doubly 'illegal' solidarity strikes. The strike
appropriated Gordon Brown's slogan 'British jobs for British workers',
allowing virulently anti-worker newspapers to 'support' it, turning the
issue into one of 'nationality'. Strikers insisted otherwise, but after
the Lindsey dispute was settled with a deal to hire 100 'British
nationals', it's not clear how far their voice was heard. So it's worth
repeating that what they said was true. Disastrous as the 'British'
slogan was, the conflict is about the undercutting of wages during an
income crisis. Collective agreements are not legally binding in the UK,
workers 'posted' under the European directive need not be paid at the
going rate. The Lindsey strikers voted not for exclusion of foreigners,
but for identical protection for local and foreign workers, and for
international (union) solidarity. Hundreds of Polish workers joined a
solidarity strike at Sellafield nuclear plant.
Also: employers now say they were provoked into hiring foreigners by ongoing '70s-style walkouts' by workers.
Predictions of the scale of economic collapse correspond strikingly to
the scale of the last decade's financial asset-driven 'growth', eg. the
Chartered Institute of Personnel and Development forecasts
approximately 750,000 job losses over the next 18 months: "equivalent
to the total net rise in employment in the preceding three years".
Oxford Economics attributes the fall in per capita GDP from the top to
the bottom of the rankings of "major" economies to "the bust in
financial markets". (For more in this vein see:www.wsws.org).
 For an account of how this works see David Morrison, 'PFI: is Gordon Brown "financially illiterate"':www.david-morrison.org.uk/pfi/pfi.htm
Exceptions in the UK have included small-scale strikes over wages by
London bus drivers, Glasgow 'community service officers', Merseyside
council workers, Southampton care home workers, Wembley (West London)
pharmaceuticals workers and 'further education' college staff at a
number of sites across England. None of these has been explicitly
crisis-related, but striking for wages at this time nonetheless stakes
an implicit claim against those of the abstract 'economy' and returns
on capital. For ongoing coverage of strikes at all levels see http://libcom.org/ and www.wsws.org/.
See libcom.org in particular for coverage of events in Greece, and see
http://www.wsws.org/articles/2009/jan2009/latv-j16.shtml for an article
on anti-austerity rioting in Latvia.
 Glasgow, West Midlands, Greater Manchester, Norfolk and Lambeth (South London)
The most widely-reported aspect of the attack on the 'economically
inactive', as proposed in December in the report of Professor Paul
Gregg and now on the legislative agenda, is a massive acceleration of
the push to move claimants off 'incapacity' (i.e. sickness) and single
parent benefits onto Job Seekers' Allowance, which would mean a
substantial cut in benefits to £60.50 a week and much heavier pressure
to grovel actively for and accept any kind of work going, regardless of
things like physical unsuitability or availability of childcare. Less
well-publicized but equally explosive is the regime proposed for 'job
seekers', based on what Professor Gregg calls 'work-equal activity',
i.e. nine to five attendance at privately-run dole offices in order to
apply for jobs by computer, under supervision and with regular
interrogation by employees of the PFI contractor (who are paid
according to the number of people kicked off the dole). Aside from the
matter of how few low-wage jobs are found or offered through this kind
of formal process, rather than by physically turning up where work is
available and/or through informal social contacts, what's really
striking is the way treatment of claimants is equated with punishment
more openly than ever, just when unemployment is starting to increase
out of control. In his mildest language, Prof. Gregg says recalcitrant
claimants, e.g. those who show up late for interviews, should be sent
'written warnings', a term borrowed from workplace 'disciplinary'
procedure; for repeated offences they should be fined. Even more
telling is that Gregg wants 'work-equal activity' to be 'like school
detention': i.e. the whole condition of being a benefit claimant should
be equivalent to that of a child being punished at school, and the
experience should be similar. And furthermore the term now used instead
of 'workfare' for forced labour imposed on dole claimants is 'community
service', which until now was confined to criminal sentencing.
Reinforcing the impression that criminal justice machinery is being
imported into the management of unemployment, if any doubt remained, is
the use of 'lie detector' tests on claimants, which has already been
underway for a while in some areas, to be 'rolled out' nationally if
the 'trials' [sic] are 'successful'. Surprise surprise, they
were a great 'success', and the introduction of the system everywhere
was announced late in December in the 'Queen's speech', which sets out
the government's policy agenda for the coming year. The lie detector
software is used on phone calls from benefit claimants: it
supposedly picks up anomalies in speech patterns, so that those who
talk the wrong way (such as... callers who for some reason find life on
£60 a week 'stressful' and can't hide it in their voices?
Or...foreigners with strange ways of pronouncing English words?!) can
be called in for further interrogation. (For some time now claimants
have been forced to contact benefits offices by telephone, regardless
of whether they actually have one. This may or may not suggest that the
lie-detector was a longstanding plan).
 See a series of articles by Aufheben at http://libcom.org/aufheben
, in particular the pamphlet 'Dole Autonomy Versus the Re-imposition of Work'.
Thus the aptly-named 'Crisis', a charity that helps state agencies
harass the homeless into job training, advertises using the slogan, "we
see the person, not the homelessness". It's hard to think of a more
succinct way of stating where the state and its 'voluntary sector'
allies assume the problem lies.
Reports on Crisis
We asked people in several countries to write down observations about social effects of the crisis.
The following is a report from Romania, written in February 2009.
»The return of the strawberry pickers «
Romania, Turnstile of Migration
At the turn of the year the airport Bucarest-Baneasa bursts at the seams. During normal business times the passenger volume of this airport for cheap airlines is already enormous, now things have gone way beyond capacity limits. Endless queues, undefined waiting hours and sticky air. Most of the people pushing and shoving their way through the terminal hall are Romanians working abroad: capsunaris, strawberry pickers as they are called in Romania, disregarding whether they work as construction workers in Bologna, as old people's carer in Paris, dockers in Rotterdam or agriculture labourers in Andalusia. Approximately 10 to 20 percent of the Romanian population - up to five million people - permanently or temporarily work abroad, mainly in Italy and Spain. Most of them spend the festive season at the end of the year 'at home' in Romania and this is when you can observe one of the biggest inner-European migration movements in the bus terminals and airports of this country. .
For some time emigration has posed a massive problem for local companies. According to a study by Manpower, Romania was the country with the highest degree of labour-shortage in 2008 . Particularly affected were; the construction sector (with half of the vacancies remaining unfilled), tourism and the shoe- and textile industry.
Although in the past years the wage level in Romania has increased considerably it is still the lowest in the EU. In the textile factories workers are still only being paid a little more than the legal minimum wage . Nowadays hardly anyone is willing to sweat for these wages. Efforts undertaken by the companies to recruit more people from the countryside fail again and again due to lacking qualifications, frequent absence from work and the unmotivated attitude of the workers towards factory work. In order to retain the remaining local employees the companies offer them two months unpaid holiday for seasonal work abroad in addition to the regular paid holidays. Despite this they did not manage to curb labour attrition due to workers shifting jobs to the new plants of the automobile parts manufacturers and electronic industries where higher wages were on offer.
The labour shortage was supposed to be solved by import of work force from Asia. Right from the beginning these migrant workers from China, India, Pakistan, Vietnam, Bangladesh and the Philippines caused conflicts and organised resistance against the management.
We report here on two examples from the textile industry:
Of the former 1,200 local employees at the apparel manufacturer Mondostar in Sibiu, only 350 kept working after new offers became available. In order to avoid bankruptcy the company hired 95 female Philippine textile workers in May 2008. The work contract with a commercial job agency in Manila guaranteed a basic wage of 400 US Dollars, 100 percent bonus for over-time and free accommodation and food. On the basis of these promises the workers took the risk of taking out individual loans of 2,500 US Dollars for the agency fee and the travel expenses.
Forcing the women to sign a second contract after arrival Mondostar tried to undermine the previous contractual agreement, to squeeze out a maximum labour performance and to lower their own expenses. For a 60 hour working week the women received a monthly wage of 235 US Dollars. From the agreed basic wage 165 US Dollars were deducted for food and accommodation and the over-time was not paid at all. The Philippine women found themselves in an real dilemma: their permission to stay in Romania was tied to the work contract, but if they quit the job they would have had to face massive debts back home in the Philippines.
Most of them have years of experience of working in textile factories in Taiwan, Japan, South Korea, Namibia, South Africa or Brunei or as domestic workers in Hong Kong or Singapore. They are able to compare conditions and they know how to organise themselves. After two months they started to boycott the over-time and confronted the company with an ultimatum. Their complaint at the Philippine embassy resulted in Mondostar not being allowing to hire any more Philippine workers. In reaction Mondostar sacked six women for 'lack of discipline', amongst them the four spokeswomen elected by the workers, and cut the wages even further alleging that the seamstresses did not meet the companies' fixed production targets. In consequence 78 workers decided to stop being fucked over and to quit their jobs with Mondostar in September 2008.
Back in the Philippines the workers filed a legal case against the job agency in Manila and Mondostar, supported by a welfare organisation for the OFW , which had also paid the travel expenses for the return trip. The legal proceedings saw a first success: the workers did not have to pay the 2,500 US Dollars commission to the agency.
The condition for the migrant workers' struggle for the betterment of their situation is everything but favourable. The workers' permission to stay is bound to the work contract, which provides the employers with an effective way of putting pressure on them. Usually the textile workers live in dormitories on the factory premises, which makes them easier to control. The contact to local workers is further impeded by the fact that in most cases their work stations are separated from each other. In addition to that there are the language barriers.
The degree of employers' repression against migrant workers is shown in the example of the Italian textile manufacturer Gamba, which runs two bigger plants in Bacau, under the name Sonoma and Wear Company. Three years ago the manufacturer was the first in Romania to apply for a licence to employ 1,000 Chinese garment workers. Some months later in January 2007 Wear Company became internationally known when 400 Chinese women went on a spontaneous strike after not having been paid the promised wage sum. After the strike some of the women returned to China, but it has still not become clear whether they returned on their own accord or whether they have been deported.
At Wear Company Gamba started a new attempt, this time employing 500 contract workers from Bangladesh. But here again, the company was only able to quell the workers' discontent by heavy intimidation and repression. In summer 2008, after several textile workers from Bangladesh did not return to the factory, their remaining colleagues were locked inside the factory premises for two months. More workers left the factory and did not return, again the remaining workers got locked in - this procedure became common practice. Despite the the Romanian media and the Inspectorat Teritorial de Munca (ITM) - the official board responsible for labour law issues - being informed about the matter, no one followed up the case. In January 2009 a report was published in the English Bengali press saying that more than half of the 800 employed contract workers from Bangladesh had left the job and crossed the border to other European countries. The reports also mention a week long strike of 200 Bangladeshi workers in a Romanian textile factory . Little to nothing is known about the current situation of the remaining workers at Wear Company. What is known is the fact that the textile entrepreneur Gamba aspires to become the consul general for Bangladesh in Romania.
Impact of the global economic crisis
In this young member country of the EU the global crisis will change the social relations drastically. An economic growth rate of 9.3 percent as in 2008, wage increases of 25 percent and an unemployment rate of under 4 percent - this dynamic might well be broken. Currently short-time work is spreading in Romania and for the first time in years the Romanian labour market is witnessing an end to hiring. In the automobile industry, in the steel- and chemical industries redundancies are on the agenda.
Due to the abolishment of the import quota , the increasing wages and labour-shortage, the textile industries are retreating from Romania. The employers' association of the Romanian textile industry announced that this dynamic is aggravated by the current lack of orders. It is most likely that the importing of foreign workforce - which has not gone beyond an experimental phase yet - will find a sudden end.
In the near future the turnstile of migration might also change direction for the "strawberry pickers". In Spain the real estate sector and therefore the construction industry has collapsed due to the global crisis; 500,000 Romanian construction workers are now threatened by unemployment. Will the airports and bus terminals soon be over-crowded by homecoming labour migrants. What kind of future outlook do they have? Will they be willing - after having got used to much higher wages and having made new experiences - to subject themselves once more to the prevalent conditions of long working-hours and low wages in Romania?
Reports on Crisis
We asked people in several countries to write down observations about social effects of the crisis.
The following is a report from California.
LIVING WITH CRISIS
In the middle of September 2008 when Lehman Brothers failed, Bank of America took over Merrill Lynch, and the economic meltdown's effects were becoming so extreme that everyone seemed to be noticing. I took a bus to work several afternoons a week and passed through San Francisco's dwindling African-American community in the Western Addition District. The sense of fear was noticeable and I often overheard people talking on their cell phones about someone being laid off, having their houses foreclosed, or simply reaching such a deep level of debt that they were personally bankrupt. Often they would be talking about foreclosures taking place in suburbs with names like Antioch, Pittsburg, Brentwood, and Stockton, which are tract home developments that had been boomtowns with large areas of African-Americans and Latinos who had previously lived in the inner cities of San Francisco, like the Western Addition, and in the poor working class districts of East and West Oakland.
During the insanity of the housing boom many families were able to take the profits out of homes in the inner city that appreciated greatly during the last decade and move, like whites did in the period after World War II, to the suburbs. They had been denied the opportunity to do so until the civil rights struggles for housing in the 1960s and 1970s had finally opened up opportunities for home ownership in the following decades. They had been denied the ability to get loans and insurance by the racist practice of "redlining" where real estate agents, banks, insurance companies, and city planners colluded to prevent non-whites from buying homes. But beginning in the early 1990s the loans they were offered, sometimes even forced to take, were subprime with Adjustable Rate Mortgages (ARMs) even if they qualified for more stable fixed rate ones. The same was happening with car loans by the late 1990s and into the 21st century many homeowners in the U.S., of all races, were using their houses like ATM machines by taking out loans against the rapidly appreciating values of their homes, some to cope with wages that had been stagnant since the early 1970s and others to go on consumer spending sprees.
In 2007, some of the suburban neighborhoods at the outer edges of the metropolitan San Francisco Bay Area, where African Americans had pursued the "American Dream" of home ownership, had become the leading cities for foreclosures in all of the U.S. In 2007 the top three were Modesto, Stockton and Merced "all in California's Central Valley" with commuters traveling to the core cities of the Bay Area for work driving as much as two hours each way. Then in 2008 those same cities changed order slightly and the top three cities in the U.S. for foreclosures were Merced, Modesto and Stockton, and another Bay Area city, Vallejo, was eighth and nearby Sacramento was tenth. These same cities where African Americans, Latinos, Filipinos and other non-whites were finally able to buy homes are the same place having the highest rates of foreclosures.
I work with several African Americans in the Berkeley Public Library. Berkeley has seen its African American population drop dramatically as many people moved to the suburbs, but still work in Berkeley, Oakland or San Francisco. One of my Black co-workers moved to one of the most popular suburbs, Antioch, where she now drives over 65 kilometers and it takes at least one hour each way. It has been the same with many other of my non-white co-workers. Because of budget cuts at the level of the State of California for funding education, libraries and public parks, programs will be cut back by an across-the-board 10%. This will probably mean that either our salaries will be reduced by 10% or our hours will be cut back by the same percentage. It is the same with schools and other public facilities, affecting all the rank-and-file employees. My co-worker from Antioch is greatly stressed because if her wage is reduced, she will be unable to afford to pay her mortgage and might lose her house. Her house is clearly "underwater" meaning she owes more for than it is presently worth. Some banks will allow her to "sell short" meaning that she can sell the house for less than what she owes the bank and they will forgive the rest. But if she is underwater too deeply, her only option is either getting evicted because she is foreclosed or "walking away" from the house and letting the bank foreclose and repossess it.
In November 2008 some of us went on a tour of some of the hardest hit areas of the nearby Central Valley. First we went to Modesto, #1 city in the U.S. for foreclosures in 2007.
On the way there, we passed through a small completely new development called Mountain House that has the misfortune to be the city with the most upside-down mortgages in the U.S. right now. Here's what the New York Times said:
"Because of plunging home values, almost 90 percent of homeowners here owe more on their mortgages than their houses are worth, according to figures released Monday [November 10, 2008]. That is the highest percentage in the country. The average homeowner in Mountain House is underwater' as it is known, by $122,000."
On our way home, we passed through another town right on Interstate 5 further south called Patterson. Its population recently doubled to just under 20,000 by gaining lots of Bay Area long distance commuters because I-5 doesn't get the gridlock traffic conditions that commuters to Tracy, Modesto, Manteca and Stockton encounter daily. A young Latino who works in Modesto in his family's real estate agency (and who along with his dad, who owns the business, were the main organizers of the 10,000+ Latino workers in Modesto who walked out and refused to work on May Day 2006; police cars followed both of them for months afterward) said that over 80% of the brand new four and five bedroom houses in the developments right off I-5 sit empty with almost all of them either foreclosed or unsold. We drove through there at sunset and it was completely dark and eerie; it seemed like the place had been hit with a neutron bomb -- as in buildings intact, but no sign of life.
We were given our tour by a group of young anarchists in Modesto. Several of them have actually squatted and know dozens of people, mostly families, who have moved back into their foreclosed homes and continue to live there. But they cautioned us that they have to be very, very careful. The cops in Modesto are brutal thugs and look for the slightest provocation to harass and arrest people. But in foreclosed areas the neighbors who are still legally housed don't mind the squatters because they keep up the properties, e.g. mow lawns, do yard work and cleanup, which keeps up appearances and helps to stave off deterioration and the look of meltdown. This slows down the slide in property values – ever so slightly – and discourages drug addicts who break into houses to smash open the walls to strip out all the copper wiring and piping to sell for salvage. Some who still legally live in their homes run electrical extension cords to the squatters as an act of solidarity. Some cities near Modesto have changed the laws to make it a crime to live in a house where the water has been turned off, calling those house legally »uninhabitable.« So the squatters often have to illegally turn the water back on. But most squatters do everything they can to stay undetected by police and other authorities.
Some core Bay Area cities like predominately African American Richmond have been hit hardest by the crisis. In Richmond's "Iron Triangle" neighborhood 7.5% of homes have been or are in the process of foreclosure and property values have dropped 72.2%. The 94621 and 94603 zip code zones in East Oakland are also hit extremely hard and every street has several homes with all their windows boarded up with plywood to prevent squatters. Over 3,500 homes in East Oakland are in the process of being foreclosed (the population for all of Oakland is around 400,000) and whole areas have the feel of being ghost towns. Deindustrialization of much of East Oakland since the 1980s started the decline, followed by gang wars over the »crack« cocaine trade, and horrifically high homicide rates remain to this day; the present crisis is making this already devastated part of the city only worse.
So far the main form of resistance to these foreclosures that we have noticed has been mass meetings called by church groups in some of the outer suburbs hardest hit by foreclosures and falling property values, like in Contra Costa County to the east of Oakland. While usually drawing hundreds of angry people, most of these efforts become nothing more then reformist attempts to lobby politicians to force the banks to renegotiate the mortgage loans. Cities like Oakland have intervened and are trying to pass laws encouraging banks to renegotiate ARM loans into more affordable fixed-rate ones and making it more difficult to evict people still living in their homes.
One exceptional form of resistance was this inspiring action by the activist group ACORN in Oakland on December 15, 2008: when Victorio Senteno's family of six was offered »cash for keys« to leave their house by the mortgage broker evicting them, 25 members of ACORN "moved in" to the broker's office, furnishing it with chairs, tables, a crib, family photos, and even a Christmas tree. The Senteno's were like tens of millions of American working class families whose mortgage payments have risen sharply, while their home values has plummeted. Several family members lost their jobs because of the crisis and are looking for work. Their mortgage lender, Fannie Mae, has agreed to a foreclosure moratorium, but their broker failed to notify them about foreclosure proceedings and tried to evict them anyway. They can remain in their home for now and are trying to renegotiate their loan.
So like the factory occupation when Republic Windows and Doors closed in Chicago last December, people are starting to draw on the historical lesson of anti-eviction and unemployed direct action of the 1930s. As Rosenzweig, in an article entitled "Organizing the Unemployed: The Early Years of the Great Depression, 1929-1933" in Radical America (vol. 10, no.4; July-August 1976), pointed out:
The jobless employed a number of spontaneous survival strategies such as informal and formal cooperative movements, family and neighborhood networks for assistance, individual and group looting of supermarkets, coal bootlegging, determined searches for work, and innovative stretching of income. At the same time, radical organizers helped stimulate more formal and political jobless actions such as sit-ins at relief stations, national and state hunger marches, demonstrations at City Hall, and direct resistance to evictions... Not only did these radical organizations [the Communist Party, Socialist Party and the Musteites] of the unemployed stop evictions and raise relief payments, they also helped to intensify the class consciousness of many of their members.
We can only hope that the squatters, the occupiers of the mortgage broker's office, and workers at Republic Windows and Doors have set an example to be emulated by working class people everywhere – and these actions will help raise an internationalist class consciousness as people struggle against the crisis across the planet.
Werner Bonefeld teaches Politics at York. He recently published
Subverting the Present - Imagining the Future with Autonomedia. This
interview is also available here http://shiftmag.co.uk/?p=260
SHIFT: This year there’s the NATO summit, the G8 in Italy, Cop-15 etc.
Do you think this could be the return of the anti-globalisation
movement? Could, or should, it take the same form that it did in the
late 90’s and how do you think the current financial situation affects
I don’t know. Of course the mobilisations in the late 90’s were
disrupted by 9/11 and from then on took a tumble. They might come back
as a consequence of the financial crisis but it very much depends how
the financial crisis is going to pan out. The material effects of the
crisis will be harsh. Uncertain is how people will respond to the
challenges and the pressures that they face. It’s difficult to strike
against money as it were. It’s much easier to strike against an
employer or even against repossession of houses. It’s possible to
organise there. But with banks it’s difficult to organise. Besides, the
business of negation is not to render banks responsible, and make them
accountable to their consumers, whatever that might mean. Such
‘responsibilisation’ belongs to the reality of bourgeois society. The
business of negation, the anti in anti-globalisation, is the creation
of alternative social relations by means of practical critique of
existing social relations. Such creation is always creation in
movement. One has to see whether we will see such a movement.
I haven’t heard from the existing anti-globalisation movement is
anything akin to what happened in Argentina with the financial crisis
in 2001. I am sure there are discussions but I wonder what really has
been learned from Latin America. There have been very many discussions,
in Europe at least, about for example the Argentinean piquetero and the
Zapatistas, and discussion as to whether we are witnessing the
emergence of a new social subject and new forms of organisation. The
outcome of these discussions have on the whole been rather predictable.
Yet, what is the reality of these movements for us, in Europe.
Suddenly, or not so suddenly, there is the long awaited and predicted
crisis and the movement seems paralysed. There’s an irony there. ‘What
should we do?’ The whole learning process, particularly from Latin
America was an academic learning process, or a process of
mythologisation. Solidarity with the YA BASTA is easy for as long as
the YA BASTA stays where it is, in Argentina, and requires no other
practical commitment in the here (and now). Solidarity with the YA
BASTA has to be a practical one, in one’s own social relations.
big issue now is not whether the protestors who, say, were at
Heiligendamm in Germany, turn up again in great numbers. The big issue
is rather whether the YA BASTA assumes practical relevance. The
composition of the movement will change. In the past, it was easy to
coalesce in critique of the so-called neo-liberal state. The
nationalisation of banks, employment guarantees by means of government
credit to ailing companies, etc., might well rupture the movement. The
state suddenly does what certain voices of the anti-globalisation
movement demanded – and this despite the fact that the socialisation of
debt is intended to guarantee, for want of a better expression, the
privatisation of profits. What is the relationship between the YA BASTA
and the state?
SHIFT: In North America and Western Europe at
least, there is this critique of finance capitalism, that might come
back again, that was the defining feature of the anti-globalisation
movement protests against the IMF and World Bank and other sort of
global financial institutions. Obviously people have always pointed to
the dangers of just criticising financial institutions and not, as you
say, how capitalism affects us on a sort of real person level. Do you
think that might be something that we are experiencing again? That the
critique of finance capitalism will run the risk of stereotyping and
WB: It might; it might not. It depends, again, how
it turns out. It would be good to predict the future, but the critique
of finance was always misguided I think. There was always this
separation between good capitalism and bad capitalism. Bad capitalism
was financial capitalism and the other capitalism was seen to be the
one that was suppressed by the bad capitalism. And the connection
between finance and production, between production and exchange,
commodity form and money form, that was never really drawn in this
anti-globalisation movement. The critique of speculation has to be a
critique of the social relations of production. That is, one should not
divide between ‘bad finance capitalism’ and ‘good industrial
capitalism’. The one depends on the other, and visa versa.
Especially in the current crisis here in England, what everyone’s been
talking about, from the conservatives to the socialists, is greed. That
the reason we have this crisis is speculation and greed by individual
bankers. The work you have done and that of others has pointed out that
this may have a relationship to scapegoating the Jew or anti-Semitism.
Yes, well that is one of these divisions between financial capital, on
the one hand, defined by greed and industrial capitalism on the other
hand, not driven by greed but by concrete matter and productive
activity. That spurts over into anti-Semitism - that’s quite right -
and that’s where the difficulty lies, I think, for the
anti-globalisation movement. How does it confront or understand the
current crisis if it merely sees it as a crisis of greed, that is, as a
crisis of regulation, a crisis that is resolvable by the state by means
of responsible regulation. Responsible for whom? For the common good?
What is the common good in a capitalistically constituted society? The
purpose of capital is to make a profit. And that is, money must command
labour. The demand for better regulation, and a more effective
integration of production and finance, does indeed focus this purpose
of money – to command labour. An anti-globalisation movement that only
focuses on the issue of greed does not see the vampire that sucks
labour out in the production process as the basis of that greed.
So, for you then, is the way to avoid this problem a return to ideas of
class and class struggles? Ideas which the anti-globalisation movement
quite consciously has left behind?
WB: I think what has to be
left behind is the old social democratic or state socialist idea of
class. That idea was based on the notion of market position, and sought
to rebalance the inhumanity of exploitative production relations by
means of re-distribution. That is the concept of class that I think
needs to be overcome. In opposition to affirmative conceptions of
class, we need to rediscover class as a critical concept, a concept
that belongs to a false society. That is to say, class struggle is
correctly understood the movement against the existence of social
classes. Class analysis does not partake in the classification of
people – its business is the critique of such classification. Class
struggle is the struggle to dissolve class society, relations of class
domination and exploitation, in favour of commune – this society of the
free and equal, an association of the freely assembled social
So if correctly understood, class should be a
critical concept, not an affirmative concept. The old class concept was
an affirmative concept; it affirmed class position. It wanted to
re-distribute in order to create a fairer deal, a new deal, for those
on the wrong side, or the wrong end of the stick. The critical concept
of class, which is to dissolve class, battles against the existence of
SHIFT: So could such a movement against class,
offering such a critique, be relevant in today’s society? Could the
anti-globalisation movement, if it reconstitutes itself as such again
next year, be an effective political player?
WB: Again, I
don’t know. It very much depends how the current crisis pans out. It
will affect jobs. It will affect income. It will be very bad for people
heavily in debt. How will they react? What will they do? And the
reaction of these people is, to a great extent, also a responsibility
of the anti-globalisation movement in terms of their critical intent of
enlightened democracy – the democracy of the demos that assembles in
the street; a democracy of and in the street. This democracy, this
practical subversion of everyday life, if the anti-globalisation
movement is able to practice that then it will become something new in
terms of its composition, relationship to capital and its state,
organisational form, and negative purpose. If the anti-globalisation
movement is not able to do that then it might well be that those who
carry the brunt, financial and otherwise, of the crisis, might not be
part of that movement. In the British context, the white working class,
impoverished as it is, has tended in certain areas to go to the right
rather than to the left. That I think is also a responsibility, not
just of those people who go to the right, but also the responsibility
of the anti-globalisation movement to mobilise for democratic purposes
– here and now. So it depends on the mobilisation, who mobilises and
where, and who is part of the mobilising coalition.
a practical level it can be argued that the anti-globalisation movement
needs a symbol, or a target around which to mobilise and that’s why
summits are so attractive. Do you that the oversimplification and
‘personification’ of capitalism, which manifests in the targeting of
summits and global elites, can be avoided while the anti-globalisation
movement continues to summit hop?
WB: Well I think summit
hopping is OK, who wouldn’t want to travel around the world and see
different places and do so for the sake of protest. Summits render
visibility to struggles, provide them with symbolism, but the struggle
itself takes place in other places I think. Summits do not struggle.
Struggles are always local, and their locality is the basis for their
globality. That is, the everyday struggle over the production and
appropriation of surplus value in every individual workplace and every
local community is the basis of the class struggle on a global scale.
‘Globalisation’ has not done away with everyday struggle. Instead, it
focuses it. If it really is the case that whole communities are in
danger of losing their houses, if people are dispossessed, then the
anti-globalisation movement will have to be a movement against
I do not know whether there will be a movement
against default, practically, on the streets. A Latin American example
is that people occupy their factories when the going gets tough and the
machines are in danger of being taken away. Will that happen here? This
is a practical question that cannot be resolved by summits. It needs to
be resoled in practice. Whether the (European) anti-globalisation
movement assumes class form is difficult to predict, but if one looks
at the often-mythologised struggles in Latin America, this is what the
struggles are, from the protection of the neighbourhood and of homes
and living-conditions, to the provision of food and water, and the
self-organisation of subsistence, from the factories to the land. And
what comes out of it? I don’t know. Whatever the future holds will
depend on the movement of the so-called anti-globalisation movement.
Where will it move, what will it move, if it moves?
1. What are the social effects of the crisis in your region?
Electricity, gas, water supply and public transport prices in particular, along with land prices and rents, had been rising at much more than the official inflation rate for years before the same happened with basic foods earlier this year. Simplistic supply-shortage reasons, often in environmentalist or geopolitical language – peak oil/nasty Russians hoarding their gas – were given for the energy and food increases, but of course the user charges didn't fall back when the underlying commodity prices did. It's also important that these price rises, which affect the poor disproportionately, didn't appear officially as 'inflation' – and consequently didn't influence wage bargaining – for a long time, generally until the food/commodity price shock this year. This was partially because these things are excluded from 'core' inflation indices because of their 'volatility', and partially because within these indices they're offset by falling prices of less essential things like consumer electronics and telecoms services.
So ongoing social effects, such as people being pushed out of central London as the proportion of their wages spent on rent and utilities rises, have kept getting worse, but this was definitely already going on during the 'boom' phase. I suspect that the real crisis effects are only just starting, and will really begin to be noticed by workers in 'service' sectors like the one I work in (press cuttings agency) over the next couple of years, in two or maybe three waves. The first part, which is already underway, will be mass redundancies, job-competition and downward pressure on wages/conditions in the 'services' that until now have fed off financial flows into the country which L.Goldner proclaimed "the most decadent in the world". A very simple example: my employer's biggest clients were Lehman Brothers and Merrill Lynch. A lot of workers in entry-level clerical jobs like mine who imagine themselves as 'skilled professionals' are going to have to reconsider their position. Not that I'm laughing, given the proportion of part-timers' income in these jobs that essentially comes from piece-work. But the worst impact will probably be in jobs where wages, conditions and security have already been 'traded' down to a minimum against relatively easy availability of employment, so that there's nothing left to 'sacrifice' while staying above subsistence level: retail, table-waiting, removals, cleaning etc. It's also likely that the damage already done in these sectors has been obscured by statistics, given the amount of informal work and the immigration irregularities involved. The second wave will come a bit later when the 'emergency' public borrowing and spending is 'paid for' by the state and fiscal restrictions are reapplied. In official terms no 'new' spending has been authorized: the money is simply being spent earlier, to be made up for by cuts or taxation (highly unlikely unless through regressive taxes like Council – i.e. poll – Tax or VAT) within the next few years. This will hit the very same people who have already lost the ability to subsist adequately through wages and/or credit, as state benefits are cut and access to public services is reduced.
The possible third wave I referred to, which could come at any time, would occur if, as seems likely, the highly leveraged privatecontractors to which so many state services have been outsourced, suffer their own private funding crisis. This would be particularly dramatic in 'public' housing, where most of the state sector has been transferred to private 'social' landlords (see answer to question 2), who have to obtain credit commercially. Problems of this kind are just starting to emerge in France, where rent-controlled landlords bought 'interest rate swaps' from the protection rackets of Calyon, Natixis, etc. It's not just housing, though: almost all of public transport and much of the medical system, the benefit system (including 'workfare' enforcement), education, sundry municipal infrastructure (even parts of the military!), is run through the same 'Private Finance Initiative' scheme, whereby the state indebts itself for decades (thus keeping immediate 'spending' off the books) to a private service provider, which obviously has to arrange and rearrange its own credit. In all these areas, tougher credit and commercial conditions for the private contractors will mean cuts to 'public' services and higher user charges, once again disproportionately affecting those who can't afford to buy their own private alternatives.
2. Are people indebted? What is happening now?
A lot of what is happening to people now, or what they fear is starting to happen, in terms of indebtedness and insecurity looks like the inevitable outcome of the way consumption and individual upward social mobility have been maintained by credit expansion during deindustrialization and flat/falling real wages since the 1970s. Maybe that's a banal observation, but I'm thinking in particular of two things consistently pushed by UK state policy since 1979: the demographic shifts towards home 'ownership' and private pensions. Even leaving aside the more recent phenomena of mortgage securitization and borrowing against rising house prices to supplement wages, a bank-lending crisis would not mean impending homelessness and total dependence on maintaining existing 'career tracks' for so many wage-workers if the proportion of the population in state-owned rented housing had not fallen from something like 60 per cent to around 20 or 25 per cent, with the difference made up almost exclusively by mortgaged 'ownership', long before any importation of full-scale 'subprime' scams. Probably more so than other 'crisis' phenomena, this is clearly a matter of political policy, engineered since the Thatcher period through a subsidized 'right to buy' for state tenants, with municipal councils banned from using the proceeds to replace the public housing sold, along with a drastic reduction of entitlement to tenancies and, more recently, transfer of remaining state housing to private sector landlords, effectively threatening tenants with much worse conditions if they still won't exercise the 'right to buy'. The situation is similar with pensions, where the deregulated explosion in the range of 'investments' offered has been accompanied by the reduction of state provision to the barest subsistence level.
The present government also plans 'compulsory saving' (i.e. gambling) through forced transfer of a portion of wages to market-invested 'individual pension accounts'. It seems worthwhile, given recent debates about the degree of 'capitalist agency' involved in 'crisis' phenomena, to emphasise these ways in which workers' individual interests have been bound to those of financial markets as a matter of long-term public policy.
3. Are there any debates about the increase of cost of living and crisis? What are your perceptions in regards to that? Do you observe common developments?
Hard to say in general terms. People I know well are hardly a representative sample: a few are attempting quite detailed analysis or criticism, while others tended to regard the long-running 'credit crunch' story as just another ideological/media sideshow, or in any case something mainly affecting 'owners' of things like houses and credit cards. The idea that falling house prices are a terrible thing met with an unsurprising lack of sympathy among those constantly struggling to stay in inner London in a context of rising rents, gentrification, public housing bureaucracy, crumbling squats etc. More widely there seems to be some nostalgia for social-democratic 'common sense' (although this has been an ongoing theme since I grew up in the Thatcher/Reagan period), and some vilification of 'a few greedy bankers and hedge fund managers'. One of the most depressing things, although it's also nothing new, is the widespread assumption – and not just among the middle class – that proletarian status without the redeeming prospect of personal upward career mobility is essentially something shameful and/or disastrous. This premise is shared both by 'left-leaning' social democrats, community activists etc., who lament that the 'socially excluded' and 'training'-deprived are denied the opportunity to 'better themselves', and by outright reactionaries (mostly young and 'aspirational' themselves, it seems), who blame 'failure' – i.e. lack of individual upward mobility – on the laziness, lack of 'initiative' or stupidity of those concerned. Another ugly development was the attempt by a government spokesman to use the crisis as a pretext to propose even tighter restriction of non-EU immigration, despite evidence of a mass outflow of those migrants whose numbers have actually risen in recent years, i.e. those from inside the EU. It remains to be seen whether this kind of idea will pick up much popular support outside the minority who object to immigration for national/cultural/racial reasons rather than because they misconstrue the causes of real pressure on wages, jobs and state services.
4. Are there actually already struggles happening on this front?
Very little so far in the way of struggle against specifically new developments. This may not be surprising at this stage, with the wave of redundancies only just beginning - 25 percent of bosses surveyed by the FT said they were planning to lay workers off within the next year, far fewer had already done so. A lot of the job losses (or just reduction in intake) so far seem to have been in casual, sometimes informal, 'service' work, where chances of collective struggle are very low, and the lay-offs themselves may not even be reported. There's been some indication of a lot of casual workers returning to the new EU states, however short-lived any labour shortage there may be.
It remains to be seen what will happen when the cuts and redundancies really get going, and the prospect of individual solutions starts to evaporate. Some workers may be more willing to act when the concrete effects of what are still presented as quite abstract financial events are unmistakable, but of course it may also be that the threat of redundancy is used successfully to force through pay cuts. Yesterday's 'Financial Times' has a panel of bosses and academics discussing the best way to combine these enticing options. The question of below-inflation wage increases was raised earlier on, before the 'inflationary' stage of the crisis had really even struck, when Gordon Brown demanded that public sector wage increases be kept below inflation (then fraudulently – see above – calculated at something like 2 per cent) as an anti-inflationary precaution. A series of feeble and unsuccessful symbolic strikes ensued. In one of the only exceptional cases, where non-teaching workers in the education system had insisted on an inflation link rather than a higher percentage offer, the state employer was held to the deal when inflation rose above the percentage offered earlier, but vowed that so such link would be agreed to ever again. More serious strikes, eg in the postal service and public transport, have generally also regarded the restructuring and attacks on conditions that never stopped throughout the boom and crisis periods. Some of the transport strikes were successful in these terms, but in the post office a compromise by the employer on the wage claim was used to push through most of the (EU-mandated) restructuring.
I don't think the lack of overt struggle so far is necessarily just a matter of ignorance or even automatic-reflex individualism, although these things are also no doubt involved. Outside the Trotskyist parties, who probably imagine the crisis to be a great recruiting opportunity, it could be that a lot of people feel in some vague and belated way that it's difficult to struggle retrospectively now against the decades of local and global restructuring that have led to the present situation. This may be especially true of social-democrats (like my parents and those of other people I know) who think we might still have a nice healthy, 'humane' capitalism if it hadn't been for thirty years of Western deindustrialization and financialization. (Of course others who vote for the same parties would just like to see pay cuts for bankers and better 'expert' regulation of markets, but I already acknowledged the role of ignorance above.)
One final thing worth mentioning is that groups doing a kind of politicized self help work, often but not always from a class-struggle-anarchist background such, as the London Coalition Against Poverty (intervening in the benefits and housing systems), Hackney Independent/Independent Working Class Association, the older Solidarity Networks, Advisory Service for Squatters and various community/housing/anti-gentrification groups, seem aware that, although their action predates the crisis, they will increasingly be responding to crisis-related conditions. The Hackney Solidarity network has called a wider meeting to discuss what to do about this. It will be important to see whether they are able to overcome what can sometimes be a limiting contradiction in this kind of community-based working-class activism, i.e. that the focus on the local community (sometimes with the implication: settled local community) can be so intense as to tend to exclude those who, precisely by virtue of the conditions in work, housing and migration over the recent years, are unable to 'settle' into any 'community' throughout their lives.
There hasn't been much sign of more assertive class struggle since the answers above were written, although that may not be so strange given that already at the time it was mostly a matter of long-term tendencies starting to show their ugly face. The most dramatic developments have been unhappy (unless you buy the idea that immiseration automatically = antagonism) and unsurprising. As has been widely reported in mainstream media, the wave of business insolvencies and pre-emptive redundancies has spread from banking into retail chains and what was left of manufacturing (such 'National Champions' as Royally-approved makers of decorated porcelain crockery). Most media coverage and government spin continues to attribute these business failures and job losses in a disingenuously direct way to consumers' alleged sudden unwillingness to spend: reference to the leveraged leverage through which even small businesses are 'owned' and which can no longer be 'rolled over', and to supply chain breakdowns (eg. the bankruptcy of the Woolworths chain bringing down ex-Virgin retailer Zavvi because Woolworths was its main wholesale supplier) are restricted to the financial pages, and 'credit crunch' debate is almost all framed in terms of lending to consumers and mortgagees. It's hard to get a general idea of how widely this skewed focus is accepted. One micro-example: the small (a few hundred workers), private equity-owned press cuttings agency where I work stages occasional 'employee forums', announcing business results and taking pre-submitted questions; my question about the chances of refinancing debt incurred in the recent private equity buyout was refused on grounds of private equity privacy, then the forum was cancelled. Meanwhile there's quite a bit of concern expressed among workers about the chances of the business surviving, but almost always in terms of how much work is coming in from clients, rather than vulnerability to financial events elsewhere. One thing that does seem clear though is that the job losses have barely started, so the media emphasis on passing phenomena like Christmas sales is misleading. Of course statistics from ratings agencies are not the point, but it's still worth noticing that in November 2008 Standard & Poor's calculated the 'speculative grade' corporate debt default rate for Europe at 3 per cent, but the forecast for all of 2009 and 2010 is 8.7-11 per cent.
Perhaps the most depressing news in terms of implications for class struggle has been that of large bodies of industrial workers volunteering (through unions of course) for substantial wage cuts in desperate bids to save their jobs. This happened late last year at JCB, then the company laid hundreds of workers off anyway; the GMB union still tried to claim it as a victory on the grounds that more workers would have been sacked otherwise. Shortly afterwards (December) the Financial Times reported that GMB workers at steel maker Corus (Tata group) had offered to take a 10 per cent wage cut to keep their jobs; the union denied this at first, then it went through on a plant-by-plant basis. Meanwhile Tata is asking for a state subsidy to 'save jobs' at Jaguar-Land Rover, the Midlands car maker it recently bought at a premium as a 'trophy asset'. Reports this week of business complaints about the cost per worker of imposing outright redundancy suggest that more moves to sidestep the problem by cutting wages and/or hours could be on the way, although this hasn't happened yet on the same scale as in some other countries. Nissan had already been cutting shifts back at its 'most efficient in Europe' etc Sunderland plant, which had moved onto round-the-clock work in Janauary 2008 and was still running on that basis in June; just yesterday though it announced 1,200 redundancies: 400 temp and 800 'permanent' workers. There have also been some signs of use of crisis conditions as a pretext to attack recalcitrant groups of workers: thus Peter Mandelson, an unpopular member of Blair's inner circle, was brought back from Brussels as a sort of crisis-toubleshooter, upon which he immediately decreed the part-privatization of the strike-prone Royal Mail, something which has been a policy goal for years but had until now been impossible to push through.
The 'return to Keynes' (Man of the Year in Rupert Murdoch's Times) continues to be proclaimed everywhere, in a way that's puzzling unless 'demand management' is to be understood so literally that desperate repumping of a lending and asset price bubble counts: base interest rates have been cut so far below inflation as to wipe out middle class pensioners' paltry income from savings accounts: the solution proposed tentatively by the government and loudly by the pensioners' Tory 'defenders' is to cut taxation of said savings, thereby adding to the 'necessity' for qualitative (i.e. public provision) austerity in a few years to pay for quantitative (i.e. helicopter money) 'stimuli' now.
As predicted above, what debt crisis means for private sector 'social' housing is starting to emerge. One private 'housing association', Ujima, has already collapsed, and the sector regulator is trying to get the more solvent landlords to lend to the weaker ones in order to bypass banks. In particular the 'strategy' of selling housing in order to fund 'affordable' rental provision is unravelling. An anonymous 'housing expert' is quoted in yesterday's FT to the effect that the government "will have to consider recapitalizing the biggest, weakest social landlords". (Yes, social, as opposed to 'antisocial', landlords. As head-spinning an oxymoron as I can imagine.)
A little-noticed state move (legislated pre-crisis) to ensure the continued expulsion of the working class from urban centres where land prices might be expected to rise, notwithstanding a burst real estate bubble, is just getting underway now: housing benefit (i.e. state subsidy of inflated private rents) is to be paid based on average rents across large, mixed-income swathes of territory, rather than according to rents on particular properties, as was the case until now. So that even in a 'market downturn', claimants receiving a 'Housing Allowance' calculated based on the 'average' across a wide area will be priced out of gentrifying enclaves where rents are above that average, whereas the previous system, with the benefit paid according to the particular rent, slowed the class purge somewhat even during the real estate 'boom'. More generally, the institutional expectation of long-term mass unemployment is probably most evident in the unprecedented punitive measures (FULL TIME supervised job-search; explicit comparisons to 'school detention' and to 'community service' sentences in the 'criminal justice' system) against dole and sickness benefit claimants announced in the 'Queen's speech', i.e. scheduled to be legislated into force some time within the next two or three years.
Latvia Shaken by Riots Over Economy
MOSCOW — Violent protests over political grievances and mounting
economic woes shook the Latvian capital, Riga, late Tuesday, leaving
around 25 people injured and leading to 106 arrests.
the wake of the demonstrations, President Valdis Zatlers threatened
Wednesday to call for a referendum that would allow voters to dissolve
Parliament, saying trust in the government, including in its ability to
deal with growing economic problems, had “collapsed catastrophically.”
For years, Latvia
boasted of double-digit economic growth rates, but it has been shaken
by the global economic downturn. Its central bank has spent a fifth of
its reserves to guard against a steep devaluation of its currency, the
lat, and experts expect a 5 percent contraction of the country’s grossdomestic product in 2009. Salaries are expected to fall substantially, and unemployment to rise.
violence followed days of clashes in Greece last month, over a number
of issues including economic stagnation and rising poverty as well as
widespread corruption and a troubled education system. In Bulgaria on
Wednesday, separate riots broke out in the capital, Sofia, after more
than 2,000 people — including students, farmers and environmental
activists — demonstrated in front of Parliament over economic
conditions, Reuters reported. Mr. Zatlers has long been aligned with
the governing coalition, so his threat to dissolve Parliament came as a
surprise — and was testament to nervousness about how economic troubles
in the region could intersect with simmering political grievances.
rioting broke out Tuesday after around 10,000 people protested in
historic Dome Square over the economic troubles and grievances
involving corruption and competence of the government.
hundred protesters lingered after most of the crowd had left and
started throwing snowballs and cobblestones at government buildings.
Several demonstrators also threw Molotov cocktails, according to Mareks
Mattisons, a spokesman for Latvia’s Interior Ministry. In a public
statement on Wednesday, President Zatlers denounced the violence, but
said it was more important to ask “why people gathered in Dome Square.”
“We must not face further confrontation, we must do the things
that are demanded by the public,” he said. “I refer to constitutional
amendments, a plan to stimulate the economy, and reform of the national
system of governance.”
Krisjanis Karins, a member of Parliament
and former leader of the opposition New Era party, said the violence
showed that financial woes had injected a new vehemence into old
Protests in Latvia, he said, tended to
follow a pattern of “standing, singing and just going home,” but the
young protesters who showed up on Tuesday evening “seem to think the
Greek or French way of expressing anger is better,” he said.
our neck of the woods, this just doesn’t happen,” he said. “But it did
this time. Everyone is trying to figure out how much of this was
provoked. Who are these people? Where did they come from?”
Whatever the answer, he said, Tuesday’s protests seem likely to force political change.
six months, we’re going to look back and yesterday will be a
watershed,” he said. “I would be deeply surprised if it were not.”
Zatlers made a series of strict demands of the Parliament, including a
constitutional amendment that would allow voters to dismiss Parliament,
and a new supervisory council to oversee economic development and the
state’s use of loans.
He called for “new faces in the
government,” chosen for competence rather than “their influence in the
relevant party.” He said the changes must be made by March 31, or else
he would propose a referendum that could dissolve Parliament.
with such specific work can we calm the public down and offer at least
a bit of hope that the process in this country will develop in a
favorable direction,” he said.
http://mondediplo.com/2009/01/06greeceBailouts for the banks, bullets for the people
Mass uprising of Greece’s youth
did Greek youth take to the streets? For the first time since the
second world war young people have no hope of a better life than their
parents. But there is also a failure of trust in politicians and all
state institutions, particularly the police
The veteran Greek politician Leonidas Kyrkos, now in his eighties,
is an iconic figure of the Greek left. He told me what he’d like to say
to the young people out on the streets: “Welcome to social struggle, my
friends. Now you must take care of yourself and your struggle.”
Following the killing of 15-year-old Alexis Grigoropoulos by a
special police unit on 6 December, school and university students have
risen up in an unprecedented outpouring of rage. Spontaneous
demonstrations, mostly organised by email and SMS, have shaken towns
and cities across the country: Athens, Thessaloniki, Patras, Larissa,
Heraklion and Chania in Crete, Ioannina, Volos, Kozani, Komotini.
This is an uprising with many origins; the most obvious is police
brutality. Alexis is not the first victim of the Greek police, only the
youngest. But its roots also lie in the economic crisis – a national
one which struck hard even before the consequences of the global
financial storm made themselves felt. On top of this, Greece is going
through a profound political crisis, both systemic and moral; it comes
from the duplicity of political parties and personalities, which has
broken all trust in state institutions.
Alexis’s death wasn’t an exceptional case, or a blot on the
otherwise pristine copybook of the Athens police. The list of student
and immigrant victims of torture and murder by the police goes back a
long way. In 1985, another 15-year-old, Michel Kaltezas, was murdered
by a police officer – a crime whitewashed by a corrupt judicial system.
The Greek police may be no worse than police forces in other parts of
Europe, but the wounds left by Greece’s dictatorship, the military
junta of 1967-74, are still open here; and the memory of those seven
dark years is deeply ingrained in people’s minds. This society does not
forgive as readily as some.
The 700 euro generation
This united front is led by a generation of the very young. There is
a reason for this: daily life for most young Greeks is dominated by
intensive schooling aimed at securing a university place. Selection is
tough and children focus hard on it from the age of 12. But once the
lucky ones get there, they soon discover the reality of life after
university: at best, a job at €700 ($1,000) a month.
The Greeks know all about the “700 euro generation”. One group has
now named a new association after it: Generation 700, or just G700.
They try to give a voice to this generation, and give free legal advice
too. Those who are lucky enough to get the €700 are freelancers or
subcontractors. Even a short-term contract is seen as exceptional,
because that would entitle you to some social security, redundancy pay
and holidays, whereas a freelance agreement, now common even in the
public services, gives you no legal rights or security.
Stratos Fanaras, a political analyst and director of the public
opinion survey company Metron Analysis, outlines the situation in
Greece: “The studies we have recently conducted show that all economic
indices as well as people’s aspirations for the future have sunk to a
record low. People feel let down and disillusioned, and cannot see the
situation improving. This reaction is the same for men and women, and
across all social classes and educational levels. And studies by the
Foundation for Economic and Industrial Research, which has been
publishing monthly reports since 1981, also show that economic indices
have never been so low.”
For the young, the political system and parties that represent it
have no legitimacy. Three political families have reigned over the
Greek political scene since the 1950s. The two main parties, New
Democracy on the right and the socialists of Pasok, have shared power
for more than 30 years.
The Communist Party of Greece (KKE), still Stalinist, is in no
position to provide solutions. The Coalition of the Radical Left
(Syriza) does at least know how to communicate with the young, and its
leap in the opinion polls in the last months has been spectacular:
after a modest 5.04% in the national elections of September 2007, it
won almost 13% of voter preferences six months later. The election of
Alexis Tsipras, 33, as leader of its biggest component, the Coalition
of the Left of Movements and Ecology, Synapismos, has also contributed
to this rise in support. The original positions it has taken on current
issues have helped to gain support from some young people, as have some
well-chosen media coups (Tsipras took a young woman immigrant from
Sierra Leone as his partner to the Greek president’s annual reception
to commemorate the restoration of democracy). Even after some levelling
out, Syriza is still getting about 8%, well ahead of the KKE (which is
finding its decline hard to swallow).
Need for a scapegoat
This struggle for primacy on the left may have led the KKE to ally
itself with the New Democracy government and the far-right Popular
Orthodox Rally (Laos) when the government denounced Syriza as a “haven
for rioters”. New Democracy needed a scapegoat to divert the public
debate from the causes of the uprising. Pasok, meanwhile, is keeping
its mouth shut, knowing that its turn to govern is coming sooner than
The government of Kostas Karamanlis has much responsibility for all
this. Elected in 2004 on a promise of openness and honesty, it has
become embroiled in scandals even worse than those of its predecessors.
Bribery, corruption, nepotism – and more. The latest concerns the
illegal trading of state land for less valuable land owned by the
monastery of Vatopedi on Mount Athos, for which those responsible have
still not been brought to justice.
The young are right to believe that in such a corrupt country, no
one gets punished. And this belief fuels the violence of their
response. Their faces hidden by masks or balaclavas, the most radical
demonstrators, mostly anarchists or autonomists, often gather in the
main square of the Exarchia district in central Athens, the area where
Alexis was killed. The police have a longstanding vendetta against the
anarchists of Exarchia, particularly because the district is right next
to the Athens Polytechnic, where students fought a decisive battle
again the junta in 1973. Street-fighting between radicals and the
police in Exarchia has a long history.
No lessons learned
TV coverage of the uprising across the world focused on stock images
of burning buildings and petrol-bombers. But there are significant
differences between these demonstrations and earlier ones. The crowds
of violent protesters are much larger. And the protests are not just in
Athens but in a host of towns across mainland Greece and the islands –
and they have been going on for some time. That suggests that a great
many young people have joined in the violence, and most had no previous
contact with the anarchists. On the barricades that have sprung up
everywhere you can find kids of 13 or 14.
The government of course used the masked petrol-bombers to inspire
fear of a “threat to democracy”. “What democracy?” ask the protesters.
It is true that schoolchildren and university students attacked police
stations with rocks and that others damaged banks. But only a few days
earlier the government, indifferent to the impoverishment of hundreds
of thousands of Greeks, gave those banks a gift of €28bn ($39bn). And
these are the banks which use private debt-collection agencies to
insult and threaten anyone who owes them small sums of money, and to
seize their property.
But young people’s anger hasn’t yet led to their politicisation, at
least not in the traditional sense. This is not surprising since the
political parties themselves, with the exception of those of the far
left, are deaf to the demands of the movement. open discussion, not
even any sign that they have got the message, no lessons learned,” said
Fanaras. “It’s as if they’re just waiting for the young to get tired of
smashing things up and believe that will be the end of the uprising.”
Some, he thinks, may retreat into passivity and isolation. Others may
be drawn into terrorist groups. “It was already like that after the
murder of Michel Kaltezas,” said Alexandros Yiotis, a former journalist
and “anarcho-syndicalist” who had been active in that movement in
France, Spain and Greece. “In particular, they swelled the ranks of the
[Greek] 17 November terrorist group.”
There are two striking things in the state propaganda relayed by the
media, especially television. The first concerns the role of immigrants
in the uprising. It is claimed that all the shops that were burned were
targeted by hungry immigrants. And even that in Asia, for example, “it
is standard practice: people demonstrate, break into shops and then
loot them.” But the violent protesters were, for the most part,
ordinary Greeks, in revolt against a corrupt political system. And when
Roma took part in some of the violence, they were avenging their own
people, forgotten victims of police repression.
Still, some of the looting was indeed the work of hungry crowds,
Greek for the most part. “It’s a new phenomenon,” said one student. “In
protests in the past you’d get students and trade unions at the front,
then political parties with Syriza at the back. Behind them would be
the anarchists and, when things kicked off, they would move among the
ranks of Syriza… and everyone would get beaten up. But now, behind the
anarchists there’s a new bloc – the hungry. Whether they are
immigrants, drug addicts or down-and-outs, they know you can usually
get something to eat on a protest.”
World turned upside down
A second invention of the government and media is the claim that
“angry citizens” have taken the law into their own hands to chase off
rioters. On the contrary: they have often tried to chase off the riot
police. Small shopkeepers shout at them to get lost; passers-by wade in
to try and rescue students they’ve arrested. Having understood they
cannot keep their children at home, parents and grandparents join them
on the streets in order to look after them. A world turned upside down.
Will the movement continue to grow? “There’s plenty of fuel for it,”
said Dimitris Tsiodras, a journalist and political analyst. “For the
global economic crisis will soon begin to bite here and a great many
young people will remain marginalised; and the education system isn’t
exactly going to improve tomorrow morning, and there isn’t any sign of
an end to political corruption.”
It is not only a question for Greece. The movement has managed to
export itself – or simply converge with others elsewhere. For one good
reason: there is a whole generation, the first since the second world
war, which has no hope for a better life than their parents. And that
is not an exclusively Greek phenomenon.