Sunday, 29 January 2012

What Happens If Greece Defaults?

Its possible that we are approaching the end game in the long running debt crisis in Europe. On any rational basis, Greece is already in default. It is almost wholly reliant on the bail-outs it has received from the EU, and IMF just to cover its current running costs, including the costs of paying the interest on its existing loans. Its private sector creditors have already agreed to write-off 50% of the loans they have made, and now the current discussions are about increasing that figure to 80% plus. The question is not really about what happens if Greece defaults, but about what kind of default it is. But, the other question is, if Greece did have a disorderly default would the consequences for workers across Europe, be as catastrophic as is being portrayed?

In his blog Paul Mason, writes,

“I understand the IMF believes a "sustainable" settlement needs an 80% plus write off - and the IMF rules do not allow it to sign off deals that are unsustainable.”

In a sense, this shows the nature of the real problem. If Banks and Finance houses can write off more than 80%, of what they are owed by Greece, then it shows that in the big scheme of things, those debts in themselves are not that significant. What is significant, is the fact that if Greece has a disorderly default, then that will trigger claims by Banks and others on the Credit Default Swaps they have bought with other Financial Institutions, which are a bet that Greece WILL default. The amount that these institutions might have to pay out on these CDS bets, could be many times what the actual Greek debt is. That creates massive instability and fear because, no one knows who is liable to pay out, on these bets, how much those bets are, and so who themselves might become insolvent. It is what led to the Credit Crunch after the collapse of banks like Northern Rock in 2007, and particularly after the collapse of Lehman Brothers in 2008. Already, the exposure of European Banks, and the fear that, unlike US Banks, which were nationalised and recapitalised in 2008/9, those Banks do not have sufficient Capital to withstand such an event. Already, that has caused interbank rates in Europe to rocket, many foreign Banks will not lend to them, and other global businesses will not deal with them. It was to deal with that situation that the ECB, with help from the federal reserve and other Central Banks, made available €0.5 trillion a few weeks ago to provide the European Banks with liquidity. So, the problem is not a Greek default as such, in fact, a lot of the Greek and other peripheral debt that was on Banks Balance Sheets, has been transferred to the Balance Sheet of the ECB over the last few months, because the ECB has been printing money to buy peripheral Bonds in the secondary markets, and the sellers of those Bonds, will have been the European Banks. The problem is a disorderly default.

The problem is that the actions of EU politicians, particularly German politicians, seems to be driving inexorably towards such a disorderly default. It was obvious more than a year ago that under current conditions, austerity measures could only have a negative effect. Perhaps the biggest problem for a country like Greece is not the debt, but its inability to generate the income to pay it off. The same cause is what leads to the debt in the first place, the inability to cover your expenditure from your income. In the new global economy, that is a problem for all developed economies, as they confront the expanding power and competitiveness of China and other new, dynamic economies. Austerity can only act to contract the economy, and create the conditions under which businesses are loathe to invest, because they can see no possibility of selling what they produce. What Greece really needed was a massive injection of new Capital in the same way that West Germany provided for East Germany, and other East European economies after 1990. But, with a growing European recession, it is not just Greek businesses that will be reluctant to invest. That is why we see around the globe, not a crisis of overproduction of Capital, but a massive hoarding of Money, which does not re-enter the Circuit of Capital, but sits in Bank deposit accounts earning low rates of interest, but whose owners are happy to take it, because they have become concerned with return OF Capital, not return ON Capital.

Paul Mason continues,

“Numerous hedge funds are reported to have bought Greek debt so as to operate in the space of uncertainty this opens up, much as a gambler operates next to a roulette wheel. If the "haircut" is 80%, I am told, many of them lose money and are prepared to trigger credit insurance contracts that will then torpedo the entire deal. They will not lose money as a result, but the European banking system will go into crisis.”

The actions of Germany's politicians, at first sight seem perverse. Almost every global economist, almost every organisation representing the interests of the global Capitalist class – IMF, World Bank, OECD, NIESR, S&P – as well as numerous think tanks, and business groups, have pointed out that the policy of austerity is not working, and that measures to stimulate growth are vital. Yet, Merkel continues to echo the views of Cameron and Osbourne that yet more austerity is needed! But, as I showed recently in relation to Cameron, thinking about this in Marxist terms, rather than crude Economic Determinist terms, makes this not at all difficult to understand. Economically, Germany has every reason to desire stimulative measures in Greece, and other parts of Europe. Germany's economy, and the prosperity of its workers have been built on being able to export to these European economies, and the existence of these other economies in the Eurozone, has meant that the value of the Euro has been lower than would have been the Mark, providing German exporters with a competitive advantage.

But, the picture that has been painted across Europe, is that the crisis in Greece was caused by a profligate government, and workers who retired too early on too high Pensions etc. That was never true. The real problem for Greece, as with other economies in Europe, including Britain and Ireland, is that low interest rates encouraged investment not in productive activity, but in blowing up speculative bubbles in shares, property etc. The cause of Greece's problems is not Greek workers, but Greek Capitalists. However, having established this narrative, just as the Tories have established the narrative that Britain's problems are due to overspending by Labour, and high wages and pensions for workers in the State Capitalist sector, it creates its own dynamic. Any attempt by the Tories now to reverse course will undermine their narrative, and mean that people will quickly catch on to the fact that they were conned by the Liberal-Tories. In Germany, with elections due, Merkel faces a similar problem. The SDP and Greens, who look set to win in the next elections, are both in favour of the creation of EU Bonds, and of the ECB acting as lender of last resort to stand behind it. If Merkel wants to have a chance of winning, she has to have a different narrative. Given that the CDU appeals to that same kind of strata in Germany, that the Tories appeal to in Britain, it is quite clear that to maintain electoral support, she has to be seen to be demanding fiscal responsibility by those who Germany is bailing-out. Of course, there is another reason for Germany to push this line. When a new European State is established, Germany will be the economic power at the heart of it. Ultimately, it will have to be the force that provides the financial ballast for that State. It has to ensure that other economies will not simply leach off it. That is why Germany is insisting on a level of fiscal responsibility that is unlikely to be maintained once such a state is established – the Maastricht criteria were not adhered to, and Germany was one of the first countries to breach its requirements.

But, if Germany continues to push in this direction it may well push Greece over the edge, making all of those plans redundant. Paul Mason writes,

“Not free are Merkel, Monti - because constrained by politics in Italy - and the Greek government. The latter have, off the record, briefed that the IMF's proposed austerity programme means "civil war". The most likely outcome of next week is they accept a fudged austerity programme that then does not work. One Greek commentator put it to me like this: "the people who sign a deal that gives away Greek sovereignty over debt that then goes wrong have to be prepared to be court-martialled". He wasn't joking.”

He may be right. Much of what has happened over the last year or so has been for public consumption. Many of the deals were done on the basis that an agreement to undertake various austerity measures would provide the justification for agreeing the latest bail-out, without any expectation that the measures would be fully implemented. That has bought time during, which the Banks and Financial Institutions were able to off load their Bonds to the ECB, and other Central Banks. Money Capitalists have been busy off-loading their potential losses on to workers and productive Capitalists, whose taxes will be expected to cover the losses. That is why they have been pulling money out of not just Greece, not just the peripheral economies, but even out of France.

So, what if Greece does go through a disorderly default? It would mean that money would be withdrawn on a huge scale from Ireland, Portugal, Spain and Italy overnight, with probably France, and other potentially vulnerable economies following suit. Claims on CDS's would escalate, probably bankrupting huge numbers of European banks, which would inevitably have a knock-on effect on US and other international Banks. It would create a Credit Crunch much more severe than that of 2008/9. Of necessity, such a credit crunch means that money stops being made available for businesses, consumers, homebuyers etc. As in 2008, it would mean that share prices crashed, and along with it house prices, as all asset prices are revalued, Banks raise mortgage rates severely, and begin a firesale on all properties where there are arrears, to prevent a capital loss in a collapsing market. Given the scale of the property bubble in places like the UK, and Spain (still) it could see property prices fall by 90%. The stopping of credit to business would inevitably lead to a sharp contraction of economic activity.

But, its important not to get too carried away by all this. There is a general misconception that the Great Depression was caused by the 1929 Wall Street Crash, and that a similar Financial Crash now would have the same result. But, the Great Depression was NOT caused by the Wall Street Crash. It may have acted as a trigger, but the real cause of the Depression lay with the ending of the Long Wave Boom that ran from the late 1880's, to 1914-20. It was that, which led to the onset of a period of low growth for Europe, which saw a number of economic crises during the 1920's, and 1930's, of which the Great Depression of 1929-33, was merely the worst. In 1987, when there was an even sharper sell-off on the Stock Market, it did not lead to a more severe economic crisis than had already existed from the late 1970's. So, the fact of a financial crisis and a revaluation of assets is not at all the same thing as an economic crisis, based upon an overproduction of Capital, particularly one associated with the termination of a Long Wave Boom.  And, today we are in the first half of a Long Wave Boom, not downturn.

A Credit Crunch does not affect all aspects of economic activity in the same way. For example, the drying up of credit is important if you are a small business dependent upon credit for working capital on a day to day basis. But, nearly all big companies have huge cash balances out of which to finance working-capital. It may lead to a drying up of consumer credit, but under current conditions, where households have huge amounts of private debt, and they are attempting to deleverage, that should be less of a problem, because, the demand for credit itself should decline. One means of that deleveraging may well be that large numbers of people themselves default on their private debts in the same way that countries might be led to do. In that way, the real burden would fall on those Money Capitalists who have been lining their pockets for the last 30 years, during the period of Neo-Liberalism, and who are largely responsible for the current debt crisis.

Of course, it is always portrayed that such a crisis will have terrible consequences for ordinary workers. But would it? If small businesses go bust, because of lacking working capital, its possible they might be taken over by a bigger company, which tends to provide better conditions for workers. If not, with a large scale devaluing of Capital Assets, it would be easier for the firm's workers themselves to take it over, and run it as a Co-op. Such a derating of Capital is always portrayed as meaning big losses for workers in their Pension Funds, but is it? The Value of the Fund might fall sharply, but Pensions are mostly paid out of the income the Fund receives not from Capital Gains made by the Fund. As a consequence of what is called “Pound Cost Averaging”, massively falling share prices, will mean that workers contributions into their Pension Funds, will buy many more shares than they did previously. Moreover, as the price of shares falls dramatically, the Yield on those shares, the percentage of dividend to share price, will rise sharply. Because, Pension benefits tend to be paid out of this Dividend Income, the potential arises for being more able, rather than less able to cover future pensions. The same is true with Pension fund investments into Bonds.

At the moment, the fear in the global economy means that owners of large amounts of Money are prepared to put it wherever they think it is relatively safe. That means that the price of Bonds in countries like the US, the UK, Japan who are able to print money to cover their debts are unsustainably high. Moreover, it is the actions of those States in printing money with which they buy their own debt, in order to pump liquidity into their economies, which also forces the Yields on those Bonds down, whilst at the same time, pushing inflation up. Once the event that is causing the fear has gone, the basis of that will disappear. The owners of Money will be able to look at investing it where it might bring in a reasonable return. Once the fear has gone, after the debt crisis explodes, businesses will once again be able to plan on investing, and be able to utilise some of those vast stores of Money – at least $15 Trillion in the US alone – waiting to be invested.

The real losers in such a process will be the Money Capitalists who over the last 30 years have rule the roost, and who have drained Surplus Value away from productive capital, both directly, and through the turning of workers into debt slaves. The Money capitalists through the links they have, and the power they exercise over right-wing parties like the Tories have been able to protect themselves from that denouement. Workers should not be conned into believing their interests are served by a continuance of that. In fact, were workers to obtain control over the funds in their pension Funds, such an event that put Money Capital in its place, could be highly beneficial to workers, who would be able to pick up huge amounts of productive capital at low prices. And a fall in house prices of 90%, would go a long way to resolving the current housing problems by making houses once again affordable for first-time buyers.

In 2008, the International Co-operative Alliance put out a statement arguing that none of the Co-operative and Mutual Banks across Europe had been affected in the way the Capitalist Banks had. If huge swathes of Capitalist Money Capital was wiped out, it would open the door for a huge expansion of those Co-operative Banks. And, as I argued a year or so ago, over the collapse of the Irish Banks, rather than the Capitalist State bailing them out, the State should have just protected the deposits of savers, whilst the Banks were allowed to go bust, and their workers take them over to run as Co-ops, taking over the assets of the Bank.

Rather than being a threat to workers, properly armed with the idea of workers taking over bankrupt capitalist property and running it themselves as worker owned Co-ops, a Greek default, and the subsequent devaluing of Financial and other assets, could provide workers with a golden opportunity.


Jacob Richter said...

Forgive my skepticism about "self-help" once more.

The CPGB had a political economy session last weekend or the one before, and Werner Bonefeld mentioned "Big Society" and "self-reliance":

Perhaps coops are more profitable, but the startup obstacles are simply too great without the state aid of legal simplicity and eminent domain.

Boffy said...

Clearly that is not true as the number of new worker Co-ops being set up demonstrates. In fact, its precisely in those areas where I've argued that such Co-ops could be most succesful - those with a low organic composition of Capital in high value production, such as software production, biotechnology and so on, where what is important is highly educated and skilled labour, not masses of Constant Capital, where set up costs are in fact minimal.

If you doubt that ask Mark Zuckerberg, or Bill Gates, or the founders of Google, Yahoo, and on and on.

Your argument that workers are helpess without the support of their main enemy in the Capitalist State begs the question of why that State would in any case want to help them. More importantly it reminds me of the arguments of the Stalinists such as the AWL in relation to situations like Libya, where we are constntly told that the workers cannot possibly defeat their immediate enemies by their own efforts, and must rely on the good offices of their other enemies, within the ranks of Imperialism, and so must continually subordinate themselves in some form of Popular Front.

No thanks, Socialism can only come through the SELF liberation of the working-class, not by the good graces of Capitalism/Imperialism and its state. Workers in developed economies have considerable resources in their Pension Funds. If they are to make any demand of the Capitalist State it is that it should take its foot of their throat, and allow them to exercise democratic control over the hundreds of billions of pounds in those funds. Then we will see what a problem start-up costs amount to.!

Jacob Richter said...

That ignores the problem posed by the growing cross-class strata of insecure, non-unionized workers and lower petit-bourgeois freelancers that is the "precariat."

All I am pointing out is that economic independence "this side of revolution" is an illusion. I also did not imply at all that the state aid was initiated without pressure.

Re. Libya and many other Third World countries, the Stalinists seem to be correct except for reliance on any segment of the "bourgeoisie" or on economically unpatriotic elements of the petit-bourgeoisie. A Bloc of Dispossessed Classes and National Petit-Bourgeoisie is reasonable (with the class leadership obviously exercised by the latter).

Boffy said...

Your "Precariat" is just the proletariat. The majority of the working-class has always been non-unionised. That is why Marxists focussed on building workers organisation even at an enterprise level that encompassed unionised and non-unionised workers i.e. Factory Committees.

Economic independence is an illusion after the revolution too, because a Workers State in a Capitalist environment will always be constrained. That is why "Socialism In One Country" is a reactionary idea. But, that does not mean, as Lenin and Trotsky showed, that this is a reason not to seek to establish such a State, only that its establishment should be seen as part of a process, a new bridgehead taken within the class struggle, which is used as that, a means to move further not to hunker down.

If workers had sufficient strength and class consciousness to "pressure" powerful Capitalist States into providing them with "aid" to establish Co-ops there would be no point in them doing so. They would be class conscious enough, and powerful enough to simply confiscate the existing means of production, and establish a State of their own.

I think that Egypt and Tunisia and Libya are once again showing that if the working-class subordinates its interests to other classes, it is likely to find itself cruelly suppressed. The point is, however, that Stalinists like the AWL, in line with their position of peaceful co-existence with Imperialism, always end up with a Popular Front with Imperialism in such situations, because like you they have no confidence in the working-class as historical agent, which transforms its condition via its own self-activity.

Jacob Richter said...

Like me?

My suggestion of a Communitarian Populist Front adapted to Third World conditions via a Bloc of Dispossessed Classes and National Petit-Bourgeoisie, Third World Caesarean Socialism, etc. is made primarily so that the proletarian demographic minorities don't engage in lunatic adventures like "class struggle in the countryside" (civil war for all practical purposes against small farmers):

Boffy said...

My point is that the emphasis within your schema on relying on the Capitalist State to provide Aid for the workers is an indication of your lack of faith in the agency of the working-class. But you Maoist Bloc of Four Classes represents that same lack of faith, and like all Popular fronts can only end up with the working class subordinating itself to its class enemies.

Marx and Engels after the expereicne of 1848, were extremely reluctant to see the working-class simply throw in its lot with these other classes. That means in instances such as Libya, where the working-class is extremely weak, and almost non-existent as a social force, the emphasis should have been on protecting that class as far as it exists, and insisting on its independence from the other "rebel" forces. The emphasis should have been on building indpendent workers organisations, from TU's, to factory Committees, to Defence Squads, to Neighbourhood Committees, whose focus should have been on defending the workers interests.

That does not mean the workers should have been neutral about the overthrow of Gaddafi or the War being waged against the country by Imperialism. It does mean that Marxists in such a situation have to be extremely keen and flexible in the tactics they employ to ensure that the workers are not simp-ly suckered into becoming foot soldiers in someone else's war.

Jacob Richter said...

On the more general point of real state capitalism, I posted just now (and elsewhere) that I have not known a single case of real state capitalism wherein the workers' real wages (i.e., after inflation) went down. Even Chinese workers, after considering all the post-Mao shit, haven't experienced this.

Now, it's good that you yourself use the word "faith," because that betrays a secular religious sentiment on your part.

I'm not a Maoist by any stretch. The New Democracy / Bloc of Four Classes neglects

1) Politico-ideological independence of the working class
2) Combating *all* segments of the bourgeoisie (i.e., there is no "national" bourgeoisie) and the properly applying "comprador" to certain segments of the petit-bourgeoisie (like those Brain-Draining their way out of countries)

Third World Caesarean Socialism, comprised of Blocs of Dispossessed Classes and National/Pan-National Petit-Bourgeoisie, goes beyond Trotsky's Permanent Revolution and Menshevik-bourgeois stagism. It even goes beyond Lenin's more correct Revolutionary-Democratic Dictatorship of the *Peasantry* and Proletariat (in practice, this reversal of groups is more correct), though it is inspired by this older position.

In Libya, since the working class is non-existence as a social force, it should *build* its politico-ideological independence *while* backing socioeconomically patriotic elements of the urban and rural petit-bourgeoisie (the latter being much of the peasantry).

Boffy said...

Whether works real wages have risen or fallen under State Capitalism or not is irrelevant. Its Economism.

Your point about "faith" is silly. I could just as easily have said "confidence".

Whether you consider yourself a Maoist or not, the position you advance is Maoist. The workers cannot build their own independence whilst "supporting" other classes. They can ally with them on a tactical basis for specific temporary aims, but hthey cannot support these other classes, because the class interests of those other classes are antagonistic to those of the workers. At all times the workers have to seek to advance their own cause, and far from tying themselves to what are after all their class enemies, the workers in Libya, and elsewhere should seek to build their links and support with workers internationally, as the only real basis of them gaining the lead for any liberation movement.

Jacob Richter said...

"Whether works real wages have risen or fallen under State Capitalism or not is irrelevant. Its Economism."

How so?

At worst, you could say it's as "broad economist" as Lassalle's mistaken Iron Law of Wages argument. At its core was a political message, that union organizing is pointless (cue the left-coms on their anti-unionism), and that only political organizing was worthwhile.

All I'm saying in conjunction with my real wages argument is, again, that economic independence "this side of revolution" is illusory.

Boffy said...

The point is you cannot argue that Marxists should advocate State Capitalism, or State Aid, simply on the basis that in varoous State capitalist regimes, workers wages have not fallen. This has nothing to do with whether State Capitalism is progressive or not in Marxist terms.

In fact, there are many economies that could be described as State capitalist where workers conditions did not improve as fast as they did under market Capitalist regimes. That is not an argument for supporting a return to some free market regime.

State Capitalism, as Engels describes in Anti-Duhring is progessive vis a vis previous forms of Capitalism, precisely because it is more mature, closer to its deouement. That is why we would defend it against a return, no other. But, simply becuase it is more progressive than those other previous forms of Capitalism - which does not in any sense mean that it is more efficient, more equitable, or capable of resolving workers problems - is no reason for us to advocate it, because what we seek is not a more mature form of Capitalism, but Socialism.

As Lenin put it,

“The bourgeoisie makes it its business to promote trusts, drive women and children into the factories, subject them to corruption and suffering, condemn them to extreme poverty. We do not “demand” such development, we do not “support” it. We fight it. But how do we fight? We explain that trusts and the employment of women in industry are progressive. We do not want a return to the handicraft system, pre-monopoly capitalism, domestic drudgery for women. Forward through the trusts, etc., and beyond them to socialism!”

Jacob Richter said...

I'm, of course, writing about "this side of revolution."

Of course I'm not arguing for State Aid Under The Democratic Control Of The 99% (in the past, "toiling people") solely on the basis of real wages. That would be reductionist crap. My real wages argument was just another leg supporting the illusory economic "independent" argument.

Take, for instance, what I've written before about state absorption of all private-sector collective bargaining representation for the sake of its free and universal servicing. This instance of State Aid Under The Democratic Control Of The 99% helps workers better relate to tred-iunion / business-unionist / "yellow" sellouts, in that they'd rather deal with blatant mediators from the other side rather than produce generation upon generation of tred-iunion / business-unionist / "yellow" sellouts of their own. In all this, this proposal reiterates the illusory nature of economic independence "this side of revolution." Real wages doesn't really enter the figure unless one considers the vast non-unionized workforce and difficulties organizing collective bargaining representation for them.

Then, of course, there's Minsky's Employer of Last Resort, for which the State Aid Under The Democratic Control of the 99% has more than enough funds but for which even networks of trade unions couldn't garner enough. Again, economic independence "this side of revolution" is illusory.

Boffy said...

I'm afraid this all comes over as very confused and confusing. It could be because you frequently write in such a way as to require the reader to have knowledge of what you are referencing from elsewhere.

It appeared from what you had said that you were supporting your argument for "State Aid" before the revolution, with the argument that such State Capitalism could be seen as progressive because workers under such regimes had not suffered falls in real wages. That is an Economistic argument, which in itself is no reason for Marxists to advocate such State Capitalism, or the "State Aid" prior to the revolution you advocate.

I do not see the idea of State control over free collective bargaining as in any way a progressive development. It is a return to the ideas of the Euro-Comm Stalinists, who sought to go down a Corporatist route in relation to developments such as the ill-fated Social Contract, established between the TUC, and Government.

Of course, there can be no real "economic independence" this side of the revolution - other other side until the stage of Communism is achieved - but that does not mean that workers should cease struggling, for the reasons Marx set out against Weston. The job of Marxists is to demonstrate in that process, why workers have to seek their solutions outside such trade union struggle, by taking hold of the means of production themselves.

But, the whole point is that "this side of the revolution" there is no reason for, and no chance that the Capitalist State will provide meaningful State Aid for workers to exercise full control over the means of production. And, as I pointed out previously, if workers were strong enough, class conscious enough to force the Capitalist State to provide such support, and to concede such control, there would be no point. Under those condiiotns the workers would just seize the means of production, and exercise control anyway!

The whole point is how we get from here to there, and that, as marx and otehr Marxists after demonstrated can only come about via the independent self-activity of the workers.

Jacob Richter said...

"I'm afraid this all comes over as very confused and confusing. It could be because you frequently write in such a way as to require the reader to have knowledge of what you are referencing from elsewhere."

My bad. I referenced Wilhelm Liebknecht's Lassallean conciliation slogan, and Minsky's ELR does need a reference paper or two.

"I do not see the idea of State control over free collective bargaining as in any way a progressive development. It is a return to the ideas of the Euro-Comm Stalinists, who sought to go down a Corporatist route in relation to developments such as the ill-fated Social Contract, established between the TUC, and Government."

What are the immediate alternatives for the situation of non-unionized underpaid labour?

"The job of Marxists is to demonstrate in that process, why workers have to seek their solutions outside such trade union struggle, by taking hold of the means of production themselves."

I do think Lassalle here was more correct than the cooperativist route. His big flaw in his anti-union rhetoric of Iron Law of Wages was that the ADAV explicitly eschewed organizing the Alternative Culture that the pre-war SPD did later on. The ADAV was all "Agitate! Agitate! Agitate!"

"But, the whole point is that "this side of the revolution" there is no reason for, and no chance that the Capitalist State will provide meaningful State Aid for workers to exercise full control over the means of production."

And here I think Jules "I am a Marxist" Guesde is correct. Have you read that book The Anatomy of Revolution?

"And, as I pointed out previously, if workers were strong enough, class conscious enough to force the Capitalist State to provide such support, and to concede such control, there would be no point. Under those conditions the workers would just seize the means of production, and exercise control anyway!"

That's quite a leap of faith here. History has shown time and again that support for major radical reform does not equal support for "revolution" and more radical change.

We're seeing this in Venezuela right now. The proletarian demographic minority there is strong enough that State Aid has to be provided ("misiones"), and there's even a vibrant Worker Control movement there, but it's not enough for wholesale transformation.

Boffy said...

The immediate alternative for unorganised workers is to find alternative forms of organisation. For example London Citizens campaign for a Living Wage. We should seek to get unions to find ways of organising, and we should look to develop Factory Committees that organise workers whether they are in a union or not. In the 19th century, the Potters Union used to organise people on a geographic basis of where they lived. That could be combined with organising the unemployed, with organising Tenats and residents Committes etc. that take collective action outside a mere Economistic struggle.

But, I wonder why you think that any such organisation is important, given your insistence on the fact that there is no economic independence this side of the revolution!

I don't agree about Venezuela. From what I can see what you have is largely a top down driven programme. The fact that a Left Nationalist regime pushes such an agenda is not the same as a majority of class conscious workers forcing such a programme on the Capitalist State from the ground up.

Jacob Richter said...

"That could be combined with organising the unemployed, with organising Tenats and residents Committes etc. that take collective action outside a mere Economistic struggle.

But, I wonder why you think that any such organisation is important, given your insistence on the fact that there is no economic independence this side of the revolution!"

There's a huge difference between organizing cultural societies, recreational clubs, food banks, etc. along with tenant organizations and so on, and cooperatives.

I think I already mentioned this, and you criticized the SPD for it, but the "business model" for all that is the Non-Profit Organization, not the For-Profit Coop. That "business model" alone stresses the lack of economic independence "this side of revolution."

Check out this discussion on "people's transportation":

The poster asked, "Would making regional networks of human transportation be a possible way to 'seize property' into the hands of the proletariat? I mean starting out with some old buses and creating a regional transportation system run cooperatively."

I answered, "That's an interesting approach to Alternative Culture, provided that these services are run on a legally 'non-profit' basis."

Then he agreed, "Yeah, I don't yet know of a good system for running rather expensive vehicles on a non-profit basis, which is obviously needed."

My response to the other parts of your response will follow.

Jacob Richter said...

The misiones were government initiatives, but the Worker Control movements aren't, despite a potential new labour law replacing the current one by Presidential Decree (because Chavez was "enabled").