Italy - Popular Frontism Leads To Disaster Again - Part 1 of 5

The Italian elections have delivered a huge win for the far right. Whether you define the Brothers of Italy as fascist or not (they are the descendants of the party of Mussolini), the fact remains that they are a far right, nationalist party, that has won a majority as a result of a coalition with other far right parties, such as the Northern League, and others such as Berlusconi's Forza Italia. 

The basis of the win for the far right is the popular frontism of the majority of Leftist parties in the preceding years. It blows out of the water, the advocacy of such Popular Frontism, as the way to fight fascism, promoted by rapidly rightward moving pundits, such as Paul Mason, and of other former Trotskyists that have collapsed into, at best, centrism, and more frequently simple liberalism. All experience of the Popular Front, as set out by Trotsky, in relation to China in the 1920's, and Spain, Brazil and elsewhere in the 1930's, is of disaster, and the facilitation of the victory of fascism.

As Trotsky noted, in the 1930's,

"Fascism is a form of despair in the petit-bourgeois masses, who carry away with them over the precipice a part of the proletariat as well. Despair as is known, takes hold when all roads of salvation are cut off. The triple bankruptcy of democracy, Social Democracy and the Comintern was the prerequisite for fascism. All three have tied their fate to the fate of imperialism. All three bring nothing to the masses but despair and by this assure the triumph of fascism."

(Phrases and Reality)

It, is of course, not just Italy, where these conditions have been created. During the 1980's and 90's, as the world economy went through its phase of long wave stagnation, workers in much of the globe were in no position to improve their condition relative to capital. That is not to say that their living standards did not, on average, rise. They did, as a result of huge rises in productivity that cheapened wage goods, but those same increases in productivity, were what meant that labour itself was weakened in the first place. It meant that gross output rose, but at a slower rate, whilst net output, the amount going as surplus product and surplus value, rose at a much faster rate. That provided a surplus of money-capital (from realised profits), which led to a secular decline in interest rates, which inflated asset prices, such as property, share and bond prices and their derivatives (fictitious capital).

So, not only did capital strengthen relative to labour, as output expanded faster than employment, but, along with it, profits increased relative to wages, and the amount going to interest and rents increased relative to the amount going to productive investment. The ruling class that owns all its wealth in the form of fictitious capital saw its wealth rise spectacularly on the back of the inflation of these assets, with the Dow Jones rising by 1300% between 1980 and 2000, whilst US GDP rose by only 250% during that time. But, it was not just the ruling class that saw its paper wealth increase spectacularly during that time. The middle class, and even some workers, who owned their own homes, or who had pension funds, or had had enough disposable income to buy into shares or mutual funds, also saw their paper wealth increase substantially, even as their wages were being reduced relative to profits.

Of course, also, the 1980's and 90's was a period of deindustrialisation in many already developed economies, as a new international division of labour was established, with mature manufactured commodities, now being produced in newly industrialising economies, where the use of large amounts of fixed capital, required only cheap, unskilled labour to mind the machines, or to assemble components endlessly on an assembly line. China was the classic example, and the result was that, in these economies, the living standards of hundreds of millions of labourers increased substantially, during that period, as they went from being more or less subsistence peasants to being industrial wage labourers. But, as this manufacturing moved to China and elsewhere, to the benefit of workers there, so, too, it meant that labour in developed economies became even more bifurcated, as I had predicted would be the case, back in the early 1980's, as this process unfolded.

In developed economies in North America, and in Europe, jobs increasingly fell into two categories a) very high skilled, high value service industry jobs, and b) low skilled, low value service industry jobs, as service industry itself accounted for 80% of employment, and new value and surplus value produced. Looked at from the perspective of the world working class, the creation of hundreds of millions of new wage labourers, which made the working-class the largest class on the planet, by the early 2000's, and the raising out of the idiocy of rural life, was a great step forward. From the perspective of the workers in the developed economies, who saw jobs disappear, and an increasing divide within their own societies, not so much.

But, during all that time, workers in these developed economies were constrained. There was unemployment caused by the labour-saving technologies introduced in the late 70's and early 80's, and by the fact that its continued effect was to increase gross output faster than employment ensuring a continued relative surplus population. And, as one commodity after another became mature, so its large-scale production could more profitably be undertaken in China, or, later, in Eastern Europe. It ensured a growth of resentment, but growing impotence to channel it. As Trotsky put it, in the 1920's, warning those catastrophists who relish the thought of crises,

“In all capitalist countries the working-class movement after the war reached its peak and then ended, as we have seen, in a more or less pronounced failure and retreat, and in disunity within the working class itself. With such political and psychological premises, a prolonged crisis, although it would doubtless act to heighten the embitterment of the working masses (especially the unemployed and semi-employed), would nevertheless simultaneously tend to weaken their activity because this activity is intimately bound up with the workers’ consciousness of their irreplaceable role in production.”

(Flood Tide)

On TV the other day, Blue Labour's Rachel Reeves, refused to give support to workers forced into striking for pay rises to compensate for rampant inflation. She claimed that the best answer for those workers was a Labour government. But, if she wants a Labour government, I suggest she does actually start supporting workers on strike, now, and getting down to their picket lines, because, otherwise why would any of those workers bother to vote Labour anyway? Fobbing them off with something that may or may not happen in two years time, when an election is called, does nothing to deal with their immediate problem of rampant inflation caused by money printing that Labour itself supported, and by NATO's boycott of Russian energy supplies, which has caused global energy prices to soar, which again Labour has championed!

Reeves claimed that the strikes being seen, now, were not seen under the last Labour government. That of course, skirted around the issue of the anti-working class policies of the Callaghan government that attempted to hold down wages in a period of soaring inflation, which led to the Winter of Discontent, and ultimately to the election of the hard right Thatcher government in 1979. But, Reeves is also wrong in relation to the last Labour government. It is always the case that, after a period of economic stagnation, such as that of the 1980's and 90's, it takes time for workers to feel firmer ground beneath their feet, to rebuild their organisations and so on, before they flex their muscles. After 1999, the global economy entered a new period of long wave upswing, and by 2007 that was manifest, as workers also began to demand higher wages to meet rising living costs.

But, in 2008, when UK tanker drivers struck for a 14% pay rise, to compensate for rising inflation, and the falls in their wages over previous years, Labour's then Chancellor, Alistair Darling pleaded with workers not to demand wage rises in line with inflation. The media, basing itself on the conditions of the previous 20 years, said the tanker drivers demand was ludicrous, and unattainable, but within 48 hours, the employers had capitulated. Similar strikes and pay rises were won by workers in Germany and elsewhere. But, of course, 2008 was the year when the global financial happened too. It was caused by rising interest rates, themselves reflecting the fact that global economic growth had risen, causing the demand for capital to rise, and with workers now demanding pay rises to cover rising prices, the supply of capital from realised profits was beginning to be squeezed.

So, just as workers began to translate that “embitterment”, Trotsky describes, into industrial action, it was cut short. After 2010, governments introduced austerity to slow economic growth, to prevent the demand for capital rising, which would cause interest rates to rise, and asset prices to fall. They printed even greater quantities of money tokens to buy up worthless paper assets, so as to inflate their prices, and simultaneously drain money from the real economy. So, even as workers saw the real economy deliberately slowed, they also saw conservative social-democratic governments inflate already massively inflated asset prices, even further, to the benefit of the rich. And, now, for millions of workers, the most visible manifestation of that became that any prospect even of being able to buy a house, despite artificially reduced mortgage rates, and other bribes, became impossible. And, as they were forced into privately rented accommodation, so they saw those rents rise relentlessly too.

Forward To Part 2