The reason these struggles did not reach the heights of the same stage in the previous cycle is that in the first decade of the 20th century, huge labour movements existed that were relatively united. Although these movements were ideologically dominated by the reformist, statist ideas of Lassalleanism and Fabianism, the revolutionary ideas of Marx were also still relatively well represented within them. In the period of downturn that began in the 1920's, these movements fractured. In the 1930's, the long wave Winter saw them go into retreat. The biggest labour movement, in Germany, was destroyed. It was not just that the workers parties were physically destroyed, but many workers, including many that had been members of the Communist Party, themselves went over to the fascists. A similar thing happened in Italy.
In the post-war period, the new boom enabled labour movements to be rebuilt, which created the conditions for workers to reassert themselves in the 1960's, but they did so on purely economistic grounds, of seeing the answer to everything in terms of more militant industrial struggles for reforms, for higher wages, better conditions etc. In other words, the basic revolutionary ideas of Marxism were no longer implanted within the labour movement, and even the revolutionary organisations were based on these kinds of reformist, statist ideas. That could work during the boom, but when the conjuncture changed in the 1970's, it inevitably set the workers up for the defeats of the 1980's.
As with the previous conjuncture, this one was marked also by the Stock Market crash of 1974. The large amount of money printing to monetise the Keynesian stimulus undertaken led to inflation rates in Britain rising above 20%. That was the start of the process by which those that had bought houses in the post-war period, saw the value of the capital sum they had borrowed being liquidated. Higher priced, new houses that had sold for £2,000 in 1960 represented around 4 times average earnings of the time. Even in 1972, a mid priced, new house could still be bought for around the same price, and now it represented around 2 years average wages. But, by the early 1980's, as inflation pushed up nominal wages significantly, that £2,000 represented less than 6 months average wages. This is in stark contrast to the effect money printing had in the following period.
When workers were defeated in the mid 1980's across the globe, it created the conditions under which capitalist states could begin to address the question of profitability. Capital itself had already begun to do what Capital naturally does – seek the highest rates of profit. As Stalinism went into terminal decline, and increasing areas of the globe, particularly in Asia, created the basic conditions for capitalist development, multinational, industrial capital began to locate in these economies, which also led to the development of domestic capital in these economies – see Imperialism and The New International Division Of Labour. The other side of this process was de-industrialisation in the former capitalist heartlands.
The response to this process differed between the developed economies. The French and German economies had been industrialised in the 19th century on the basis of state capitalism – Louis Bonaparte in France, and Bismark in Germany. The state occupied a different role in the economy, and ideology of these countries than it did in, for example, Britain or the US. Moreover, in Germany, in particular, the polity was based upon the social democratic consensus, of shared interest between workers and big industrial capital. It was reflected in the different approach, whereby in Germany changes in working practices etc. were brought in by negotiation, and consent, whereas in Britain, there was resistance to change, and changes only occurred usually after prolonged struggles.
The consequence was that capital fled those areas where it faced such costly battles, and settled in areas where there was an abundance of low wage labour. At the same time, Germany retained large amounts of capital, and restructured so as to focus on producing high value goods, in which it could be globally competitive without the need to inflict the same kinds of cuts in living standards as were imposed in Britain and the US. There was another factor in France and Germany, and that was the role of property. In both countries, large numbers of people rented rather than bought their houses. That provides economic benefits as far as labour mobility, but the other effect was that these countries did not suffer booms and busts in house prices as happened in the UK and US.
As workers were defeated in the mid 1980's, and as industrial capital fled the UK and US for Asia, commercial capital and money-capital became more important in these economies, and filled the gap. The commercial-capital sold the low priced imports now flooding into the economy from Asia, whilst the money-capital lent money to people so that they could buy these goods, absent their wages being sufficient to do so. Both money-capital and commercial capital in the US and UK, shared in the surplus value created by workers in Asia, by enabling the firms in those countries to realise that surplus value, by selling their commodities to British and US consumers.
To prevent these masses of cheap goods causing deflation, the central banks printed vast amounts of paper money tokens, and expanded credit. It necessarily found its way into blowing up asset price bubbles. From 1982, onwards, stock markets started an astronomical climb that has continued until today only punctuated by periodic busts. The classic expression of this process was the development of the twin deficits (trade and budget) that arose in the US, and was the trigger for the Stock Market crash of 1987. As with the previous conjunctures, that crash signalled the change from the Autumn phase of the Long Wave to the Winter phase.
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