Wednesday, 13 September 2017

French Workers Not Macron Show The Way Forward

It is no surprise that Blair-rights and other conservative social-democrats welcomed the election of Macron, in this year's French Presidential Election. On the one hand, they had taken fright, after the election of Trump, after the Brexit vote, and the potential for ultra-right nationalist candidates to be elected in Austria, Netherlands, and even France and Germany. On the other hand, they had taken fright at the rise of Corbynism in Britain, of the success of Bernie Sanders in the US, even if he didn't, in the end, get the nomination, and the potential, still lurking in the background, of a revival of the fortunes of Syriza in Greece, and Podemos in Spain, along with similar forces across the EU.

When, in the French primary elections, the safe “centre ground” politicians of both right and left, within the Republican Party, and the Socialist Party, got trounced, and more radical politicians of both right and left came to the fore, they took fright even more. Hamon represented the best hope for French workers, but the role played by Hollande, over the period of his Presidency, and of the other leading Socialist Party politicians, had so tarnished its name, that workers turned away from it, much as they turned away from Labour in 2010. Unlike in Britain, however, a semi-credible pseudo-left alternative to the Socialist Party existed in the form of Melonchon. In reality, Melonchon did not represent a left-wing alternative to Macron, but represented a reactionary, nationalist alternative, whose programme was not that different from the reactionary nationalist programme of Le Pen, and the Front National, just as, in Britain, the reactionary nationalist programme of Stalinist fronts such as No2EU, was not that different to the programme put forward by the BNP, or UKIP. 

And, by drawing votes away from Hamon, the consequence of Melonchon's campaign was to ensure that the final round of voting would be between Le Pen and Macron. I advised an active abstention, because there was no reason for workers to vote for either of these anti-working class candidates. Much of the French Left adopted the same position, and many French workers appear to have heeded that advice or to have come to the same conclusion themselves, because there was mass abstention, not only in the final round of voting for the Presidential elections, but also in the Parliamentary elections. Macron and his newly formed “party” won the elections, but it was really a pyrrhic victory, because it is clear that they had no real popular support, and indeed faced active opposition and hostility to the Blair-right policies they intended to implement. Macron's policies represented merely a continuation of those policies that Hollande had been implementing over the previous period, but raised to a higher level of attack on French workers.

Macron's “popularity” amounted to little more than the kind of “Cleggmania” that flared up and quickly died in Britain in 2010, and with the same politics. It was based on little more than a plague on both your houses, by voters in their response to both the Socialist Party, and Front National, and a personality cult, built up by the media for the photogenic Macron. As with Cleggmania, and as with the naivete of Borgen, such a basis for a political party is less than ephemeral. It has already become so with Macron, whose popularity ratings have plummeted over the last few months. That is before he even enters into the street battles with French workers that his conservative social-democratic policies entail.

The French workers are organising to defeat Macron's attempts to impose the same kind of Thatcherite, anti-working class measures to limit the ability of workers to defend themselves that were pushed through in Britain in the 1980's, and that Blair inherited and maintained in the 1990's. As I have written many times before, this is not the 1980's. The conditions are completely different. In the 1980's, when Thatcher pushed through her reforms, and Reagan followed suit in the US, the global economy was entering a long period of decline; workers had built up some reserves, and wage share had risen. It meant there was scope for wages to fall, as unemployment rose, and workers increasingly were forced to concede, and to draw down on some of the reserves they had built up. But, today, in large part, workers have already drawn down those reserves, and more. Its not just in Britain that the levels of private household debt have soared. In part, that huge debt, turning workers into debt slaves as well as wage slaves, is one reason that they have been subdued, because they have to stay at work, where possible, and even take on several jobs, just to service those high levels of debt, let alone be able to make ends meet for their current consumption.

This is not a time when wage share is high, and capable of being reduced, but where it is already low, and has been low for a prolonged period. In the 1980's, the long post war boom had ended, the global economy had gone through the crisis period from 1974 to the mid 1980's, labour was being replaced by technology in a whole series of industries, and a long period of stagnation had set in. In the period after 1999, the global economy again began to grow strongly, and it didn't take long for workers to begin to demand pay rises, as inflation began to spike. Governments took fright, and began to raise official interest rates, but even the modest rise in interest rates, led to the bursting of the huge financial bubbles that had been inflated over the previous thirty years. It led to the financial crisis of 2008.

Since then governments and central banks have tried to reflate those bubbles, to protect the fictitious wealth of the top 0.001%, and by diverting potential money-capital into that speculation, and away from real capital accumulation, assisted by their policies of austerity, to restrict the growth in aggregate demand, they have sought to prevent economic growth once again increasing, as it did in the early years of this century, and facilitating, the growth in the power of workers. But, despite that, the global economy has continued to grow. Even in the EU, where the most egregious implementation of austerity was undertaken, the economy is growing again, at an increasing pace. In the end, the owners of fictitious capital, of shares and bonds, can only see an increase in their interest payments if capital itself expands, and thereby produces greater masses of profits, from which the interest is deducted. There comes a limit, even with the massive destruction of currencies that global money printing has brought about, to the extent that the prices of fictitious capital can be inflated, unless profits themselves expand, which in turn requires real capital to be accumulated.

And, when, despite all of the best attempts of governments and central banks to restrict it, real capital does accumulate, and employment expands, and workers then begin to spend their wages on additional goods and services, the natural laws of economics and competition take over. If the demand for shoes increases, producer A will not limit their expansion of shoe production, for fear that producer B will increase their production of shoes so as to increase their market share, and thereby increase their profits. As producers A and B increase their production, and invest in additional machines, materials and workers, so additional demand is put into the economy. More workers are employed, who also then spend their wages, to demand more shoes, clothes and other goods and services. And, if producers A and B, and all the rest have to reduce the amount they pay out as dividends to shareholders, in order to undertake this investment, they will be forced by that same competition to do so. As, that happens, or as firms issue more shares and bonds to raise the capital required, so that leads to a fall in the prices of bonds, and shares, which provides an additional incentive for the owners of loanable money-capital to use it for productive purposes, for real capital accumulation, rather than simply for speculation in existing financial assets. Its one reason that people like Elon Musk, or Jeff Bezos have been using their money-capital to invest in real capital, in space technology and so on.

This is the opposite of the conditions that existed in the 1980's. And, another thing that is different is that although things like the Internet, and the microprocessor continue to have an effect on the costs of production, a large part of their effect on raising productivity, has already taken place. The main impact of these technologies today, is in the development of whole new ranges of goods and services, which in turn provide an outlet for the investment of capital, and additional employment of labour. The proportion of labour employed, for any amount of capital may be lower today than it was in the 1980's, but the absolute amount of labour being employed is increasing and will increase at a faster pace, as capital expands itself absolutely, by a much larger amount.

Economic growth is rising in the EU, including in France, and that puts workers in a stronger position. That means that Macron's ability to impose Thatcherite/Blair-right restrictions on workers is that much less. But, for the same reasons as set out above, the policies of Macron, as with those offered by Blair, offer no way forward. The alternative to those conservative social-democratic politics is either the reactionary politics being offered by the nationalists, or else the progressive social-democratic politics that seeks to build workers unity across Europe, and to introduce greater regulation and planning of capital so as to maximise capital accumulation, as the best conditions for the development of the working-class, and for its assuming the role of ruling class.

The conservative social democratic policies of Macron and Blair, and their ilk, takes as its starting point the idea that workers interests can only be advanced by advancing the cause of capital. As Marx sets out in “Wage Labour and Capital”, that is true as far as it goes. The expansion of capital, does indeed create the best conditions for workers to advance their interests, within the confines of capitalism, and until such time as workers are in a position to turn themselves into the ruling class, that is the condition with which we must deal. But, when the conservative social-democrats consider capital, they really only consider the position of a certain section of capital. In fact, not really of capital at all, but only of fictitious-capital, that is of the owners of loanable money-capital, the owners of shares, in particular, and who via the ownership of those shares impose their interests over the control of real productive capital.

But, as Marx sets out in Capital III, the interests of this fictitious capital, of the owners of these shares, is, in fact, inimical to the interests of real capital, just as much as is the interests of landed property, which leaches surplus value from profits in the form of rent. The owner of money-capital, the shareholder stands in opposition to the functioning capitalist, whose function is to accumulate capital, because the former seeks to maximise the amount of interest (dividends) they can extract, which thereby reduces the potential for accumulation. During periods, when real capital is accumulating rapidly, the interests of the two can be reconciled, because the rapidly accumulating capital, produces increasing masses of profits, from which increasing masses of dividends can be paid, without significantly damaging capital accumulation.

But, again, that is not the condition that exists today. In the 1970's, dividends constituted around 10% of profits; today they constitute around 70%. That represents a significant restriction on the potential for real capital accumulation. The interest of real capital accumulation, and thereby of the derivative interest of workers, who benefit from that capital accumulation, resides in a diminution of the power of that fictitious capital, and its owners. Real capital accumulation requires that the power of shareholders in controlling real productive-capital be at least minimised if not removed entirely, via changes in the laws of corporate governance. Rather than focussing on attacking workers rights, further, what Macron and Blair et al should be focussing on, if they want to be truly “business friendly”, is an attack on the ability of shareholders to exercise unwarranted control over socialised capital.

If Macron or Blair wants to see a progressive development of capital they should focus on removing the influence of shareholders and other parasitic elements, who act to limit real capital accumulation, and who divert potential capital into the financing of speculation, and unproductive consumption by those parasitic elements. They would instead focus on introducing democratic control over the socialised capital, by extending the current arrangements for co-determination, on company boards, and making all such company boards electable by the workers and managers within the company. They would abolish or significantly reduce Corporation taxes, so that the workers in companies could use all retained profits for real capital accumulation, and instead transfer that tax burden on to unearned incomes, such as dividend income, or interest on bonds, as well as on to a wealth tax on all assets over say £5 million.

By standing up against the attempts of Macron to defend the interests of those parasitic elements of society, the French workers are making the first step in setting out the kind of progressive social-democratic strategy that is required to restructure and rebuild capital across the EU. That is the first step also in creating the conditions for the restructuring of the labour movement across Europe.

No comments: