Wednesday, February 10, 2010
Now, entering stage left is lenin over at Lenin's Tomb, with a well timed post that couldn't be more germane to the subject:
Thus, if you're committed to human emancipation, if you're committed to radically rethinking economic and social organization, Trotsky's worry is that you cannot accomplish this within the parameters of parliamentary procedures under capitalism.
Here's the argument for why this might be the case. Holders of economic power can make use of this power outside of the electoral arena. Capitalists can make threats. They lay off politically active workers that are 'trouble makers', they can move their operations to other places, they can close factories, they can threaten democratically-elected governments with disinvestment, layoffs, etc. They may purchase and privately control and own media institutions. Economic power is not relinquished without a fight. And even when regulations and limits are imposed upon capitalists, they will relentlessly deploy their economic power to game the system and find ways to get the limits and regulations repealed. Witness the slicing and dicing of the regulatory apparatus put in place in the 1930s over the period from 1973-present. It took a while, but their incessant pressure and efforts eventually paid off.
It is also crucial to point out here that the struggle to reconfigure economic power via electoral institutions never occurs on a level, fair playing field. This struggle always occurs within a social formation already organized around concentrations of class power. Moreover, even when a progressive left-wing government is elected, it runs up against the entrenched extra-electoral power of capitalists. An instructive case study here is socialist head of state Salvador Allende in Chile circa 1970-73.
Allende was elected by a broad coalition of center-left and left-wing parties in Chile amidst uproar from the landed elites and ruling classes in Chile. When Allende tried to reform economic institutions and put land reform into law, his efforts were stonewalled and sabotaged by economic elites who used their power to "go on strike", lay off workers, suffocate the economy and try to bring the country to its knees.
As discussed here many times over the last couple of years, we are living through one of the most remorseless economic rationalizations ever attempted, one based upon centralizing more money and power within elites while subjecting the workforce to increased insecurity in every aspect of their lives. The bursting of a historically unprecented speculative bubble has set the stage for an attempt to restructure the global economy along lines that predate the emergence of trade unionism and social democracy.
The current speculative attack on the Euro is a very powerful vote against EU states that investors (capitalists) do no believe have moved swiftly enough to cut their budget deficits. The rules of the Stability and Growth Pact agreed among EU member states say that budget deficits must not exceed 3% of GDP. Those rules were designed to put a cap on public spending. They have provided the occasion for various EU governments to slash and burn welfare and public services, and they effectively insulate any government that wishes to do so from criticism - this is the cost of being a member of the EU, they say. Of course, the rules are subject to interpretation and haggling, and two of the most powerful EU states - namely France and Germany - were able to force through some get-out clauses when they went in to deep recession in the early 2000s and found themselves repreatedly breaching the 3% limit. Nevertheless, EU member states are now being pressured to get their own budgets back within that limit.
Greece has been the subject of investors' disapprobation lately, with a deficit of 12.5% (slightly lower than the UK, at 13%, and comparable to Ireland and Spain). The government has been instructed to look for ways to make big spending cuts to meet this EU target. And though it was elected on a promise not to cut wages, the spending cuts agreed at the EU include a 10% cut in wages. George Papandreou, defending this betrayal, was able to cite a speculative attack on government bonds, which drove up the yield (the interest repayable) to more than twice that of Germany - which means it costs the Greek government more than twice as much to fund its deficit. He said: Greece is at the centre of an unprecedented speculative attack: we cannot be at the mercy of creditors. Despite our tragic mistakes, our fate is today defined by rating agencies that bear responsibility for the 'bubble' that led to the global crisis in the first place. So, the pressure being applied by this 'virtual parliament' of capitalists is being used to deflect criticism of the elected parliament of Greece while it does the exact opposite of what it was elected to do. This is Pasok's only answer to the trade unionists who will be undertaking mass strike action this week.
The effects of such policies are not difficult to establish. The Irish government, arguably the most enthusiastic neoliberal state in Europe, didn't hang about. Its response to the economic crisis was to impose several austerity budgets which depressed GDP by 5%.
If the attempt succeeds, as it has to date, it will cause generations of future leftists to wonder whether the creation of the bubble and its subsequent collapse was by design. A conspiracy theory of sorts, for those leftists that ascribe events more to human agency than to the interrelated structures of capitalist society. Life is messier than that, and not reduceable to a linear narrative along a straight line, but one could understand why they might consider the apparent cause and effect relationship as indicative of a calculated effort, especially when one looks at the persistence of the effort to cut Medicare and Social Security benefits here in the US, as expressed by Treasury Secretary Geithner last Sunday. For those of us living through this nightmare, the most important aspect of the situation remains the failure of any effective opposition to emerge.