Redux

Just flown back from a week and a half in Spain, and boy are my… never mind.

Talking of bad starts, the first thing I heard on the radio the other day when I got back into the country was a column by Olivia O’Leary about the Fine Gael ructions. The combination of the utter dullness of the subject matter with the perfervid enthusiasm of the broadcaster had me longing for the comfort of a Ryanair seat. I do not wish to single out one broadcaster for this, since I am really concerned with a tendency, but there are times when listening to RTE Radio is like getting forcibly medicated by an aurally constituted, psychotically happy Nurse Ratched.

Despite the fact that one is bombarded with news about it from all media outlets, no-one in their right mind ought to give a rat’s ass what about happens in the Fine Gael leadership contest. I pointed out a few months back that ‘Richard Bruton’s chances will now get talked up ad nauseam in the media, and just as the British media had ordained Tony Blair as the right Labour candidate before any leadership contest had taken place, a similar course of events will now engulf the nation, and the ruling class will look to seize the opportunity to rebrand the country with a vigorous modernising veneer’. That to me smacks of being right.

From what I can see, a substantial section of Fine Gael has shit the bags because Labour have pulled ahead in the polls. They think voters are turned off by Enda Kenny when in fact they’re just not that into Fine Gael as a party, and with good reason, seeing as Fine Gael are largely indistinguishable from Fianna Fáil. Now my interpretation of Labour’s improvement is that because they articulate centre-left policies, and in a country where right-wing formations have ruled the roost since ever, lots of people want to see some sort of substantial change. And whilst I don’t agree that Labour are going to do this, I can see why people might find the idea that they might do so attractive.

In other words, the population is moving to the left in its voting intentions. And it stands to reason, therefore, that a right-wing media will have no intention of subjecting this trend to any sort of meaningful examination, preferring instead to represent politics as chiefly a spectacle of the centre-right. For this reason, the Irish Times dedicated more than 3,000 words of its op-ed writing to the FG leadership contest yesterday.

Anyway, as something of an antidote, here’s a translation of a piece that appeared on El Público’s website today. Titled ‘Class Struggle in the EU‘, it’s written by Vicenç Navarro, who holds a chair in Public Policy at Pompeu Fabra University and is professor of Public Policy at Johns Hopkins.

A reading of our reality that has been generalised in the political and media culture of our countries is that we live in a globalised world in which states are losing power, being replaced by large financial and industrial firms (called multinationals) which now constitute the units of economic activity in the world. The neoliberal right applauds this evolution, which they consider responsible for an enormous prosperity. Sectors of the governing left, on the contrary, lament this evolution and point out the costs that these changes signify for democratic institutions, since they assume that, in this scenario, it is economics that determines politics. And they conclude that, in a small country -like Spain- trapped in this globalised system, the State can do little, except to follow what globalisation (financial and commercial markets) demands of it. It would seem, then, that there is no alternative but to reduce public spending and reduce wages.

Such a theory, however, is wrong. The small Scandinavian countries are among the most globalised countries in the world. Due to their small size, their economy is very integrated in the European and world economy. Their total exports and imports relative to GDP is the highest in the world. And, however, they have the most developed welfare states and the highest wages in Europe. The cause of this is that power relations (among which those of class, but also those of gender) have a configuration favourable to the popular classes. The working classes, in alliance with the middle classes, have developed advanced welfare states (characterised by the universalisation of labour and social rights) and high living standards, in contrast with the countries in the south of Europe (Greece, Portugal and Spain), where the historical dominance of their states by the right has ensured squalid welfare states, low wages, and low living standards. To point at lavishness and exuberance on public spending in these countries as the cause of the crisis in the Euro, as some neoliberal authors are writing, is laughable.

The left must recover class analysis, forgotten for some time now, to understand our realities and understand that, contrary to what is being promoted, states continue to have a central role and that power relations in each country are the determining factor in its economic and social development, as well as the way in which each responds to the crisis. What is more, the wrongly-named multinationals are in reality transnational firms, which is to say, based in a State, which operate in various nations. And it is impossible to understand their international behaviour without understanding the relations of such firms with the State in which their headquarters is based.

The construction of the European Union (a step I see as positive) was made based on a neoliberal institutional architecture (which I consider negative, see the Europe section on www.vnavarro.org), a result of the enormous influence of the German banking sector on the German state, a consequence, in turn, of the weakness of the working class, a result of the widespread availability of cheap labour from eastern Germany and the countries of eastern Europe. This weakness explains the economic stagnation of that country, caused by low domestic demand (a consequence of wage reductions and the spectacular descent in labour income as a percentage of national income) and the limited economic stimulus. As I pointed out in a previous article (“La sabiduría convencional europea”, Público, 10-06-10), such power relations in Germany were decisive in configuring the “German model”, based in a higher competitiveness due to a growth in productivity well above growth in wages, which creates great wealth that is concentrated in exporting firms, including banks. Gerhard Schröeder won out in his conflict with his minister for Finance, Oskar Lafontaine, and with the unions, which opposed this model, favouring a model based on domestic demand instead of exports.

Something comparable happened in the UK, where the government of Tony Blair gave full independence to the Bank of England and liberalised the banking sector, converting the City into the global centre for hedge funds (which justifies the name given to it, “the Wall Street Guantánamo”, for being even more deregulated than Wall Street). Left groupings within the Labour Party were defeated and unions marginalised. In both cases (Schröeder and Blair), socioliberalism (the incorporation of neo-liberalism in social democracy) was what contributed largely to the domination of finance capital in the European Union and, with it, the enormous crisis in social democracy in the European Union.

In the UK, the Labour Party passed from having 33% of the total electorate in 1997, to 25% in 2001 and 22% in 2005. If this country had had a proportional system, the Labour Party would have lost its parliamentary majority by 2001. The fact that it did not lose it is due to the perverse electoral system, which allowed it to keep a majority for 13 years, and this was wrongly presented as proof of its popularity. Abstention and disillusion were also reflected in the loss of half of its affiliates.

Something similar occurred in Germany. Schröeder’s Agenda 2010 programme was the beginning of the end for his party as one of government. It lost the elections and the party went from having 800,000 members to 380,000. It was not social democracy, but the growing distancing of governing social democratic parties from the practices identified with such a tradition, that led to its decline. Will the same thing happen in Spain?

I remember not too long ago being at a talk given by an Irish union boss who said that union power was dwindling but that what was needed was a Scandinavian-style economy with greater social protections. Yet as Navarro points out above, you can’t have one without the other. But don’t expect to read that in the papers or hear it on the radio.