Wednesday, 16 June 2010

Historian warns of “New Age of Rage”

The last few weeks have seen some articles, statements that have a common theme. That being that the current austerity measures taking place across Europe will provoke as the historian Simon Schama put it a “New age of rage.

Schama is not a historian with left wing proclivities. In an article for the Financial Times he said “Far be it for me to make a dicey situation dicier but you can't smell the sulphur in the air right now and not think we might be on the threshold of an age of rage. The Spanish unions have postponed a general strike; the bloody barricades and the red shirts might have been in Bangkok not Berlin; and, for the moment, the British coalition leaders sit side by side on the front bench like honeymooners canoodling on the porch; but in Europe and America there is a distinct possibility of a long hot summer of social umbrage. 

Historians will tell you there is often a time-lag between the onset of economic disaster and the accumulation of social fury. In act one, the shock of a crisis initially triggers fearful disorientation; the rush for political saviours; automatic responses of self-protection, but not the organised mobilisation of outrage. Whether in 1789 or now, an incoming regime riding the storm gets a fleeting moment to try to contain calamity. If it is seen to be straining every muscle to put things right, it can, for a while, generate provisional legitimacy”.

While the Europe-wide demonstrations and strikes are at an early stage, they are significant in their development. Schama’s attention to history is correct. What he describes above is the development towards a revolutionary situation. He goes on “Act two is trickier. Objectively, economic conditions might be improving, but perceptions are everything, and a breathing space gives room for a dangerously alienated public to take stock of the brutal interruption of their rising expectations. What happened to the march of income, the acquisition of property, the truism that the next generation will live better than the last? The full impact of the overthrow of these assumptions sinks in and engenders a sense of grievance that 'Someone Else' must have engineered the common misfortune.

The stock epithet the French revolution gave to the financiers, who were blamed for the disaster, was "rich egoists". Our own plutocrats may not be headed for the tumbrils, but the fact that financial catastrophe, with its effect on the "real" economy, came about through obscure transactions designed to do nothing except produce short-term profit aggravates a sense of social betrayal. At this point, damage-control means pillorying the perpetrators: bringing them to book and extracting statements of contrition. This is why the psychological impact of financial regulation is almost as critical as its institutional prophylactics. Those who lobby against it risk jeopardising their own long-term interests. Should governments fail to reassert the integrity of public stewardship, suspicions will emerge that, for all the talk of new beginnings, the perps and new regime are cut from common cloth. Both risk being shredded by popular ire or outbid by more dangerous tribunes of indignation”

It should be made clear that Schama is no revolutionary historian and does not oppose the capitalist system. He is warning the ruling elite that unless it is seen to punish the “perps” as he says a revolution is on the cards. But his solution to the crisis lacks any historical depth and is mostly ineffective.

“At the very least, the survival of a crisis demands to ensure that the fiscal pain is equitably distributed. In the France of 1789, the erstwhile nobility became regular citizens, ended their exemption from the land tax, and made a show of abolishing their own privileges, turned in jewellery for the public treasury; while the clergy's immense estates were auctioned for La Nation. It is too much to expect a bonfire of the bling but in 2010 a pragmatic steward of the nation's economy needs to beware relying unduly on regressive indirect taxes, especially if levied to impress a bond market with which regular folk feel little connection. At the very least, any emergency budget needs to take stock of this raw sense of popular victimisation and deliver a convincing story about the sharing of burdens. To do otherwise is to guarantee that a bad situation gets very ugly, very fast”.

Schama’s analogy with France is legitimate, but his sleight of hand does nothing to describe how we have presently come to this economic mess. Capitalism as a system has caused this crisis not just a collection of corrupt individuals who if replaced and suitably chastised everything will be okay. Schama discounts a revolutionary change of government to solve the crisis and makes a significant point that elections are very useful in quelling the mob. But as Marx said of elections workers are merely replacing one set of money grabbing capitalists with another.

Schama goes on “we face a tinderbox moment: a test of the strength of democratic institutions in a time of extreme fiscal stress. On the one hand, we should be glad that the mobilisation of public energy in elections can channel mass unhappiness into change. That is what we must believe could yet happen in Britain. Elsewhere the outlook is more forbidding. In the sinkhole that is the Eurozone, animus is directed at unelected bodies - the European Central Bank and International Monetary Fund - and is bound to build on itself. Those on the receiving end of punitive corrections - in public sector wages or retrenched social institutions - will lash out at their remote masters. Those in the richer north obliged to subsidise what they take to be the fecklessness of the Latin’s will come to see not just the single currency, but the European project as an historic error and will pine for the mark or franc. Chauvinist movements will be reborn, directed at immigrants and Brussels dictats, with more destructive fury than we have seen since the war”.

While Schama is correct to point out the dangers from this crisis is a move to the right by sections of the population, on the other hand, he rules out directly that a revolutionary movement from the left could emerge and succeed. On this matter, the warning from the Daily Telegraph is perhaps more significant. In the article, Europe's deflation torture is a gift to the Far Left. It says If Europe’s ultra-Left has so far reaped a little dividend from the great "Crisis of Capitalism", this will surely change as the Eurozone’s 1930s policies of wage deflation sap the credibility of the governing centre and the EU itself”.

“The tragedy of the interwar years in Germany was that the Social Democrats - then the world’s foremost socialist party - became fatally tainted by acquiescing in Bruning’s deflation torture from 1930 to 1932. They did so, of course, because they dared not confront the orthodoxies of the Gold Standard”. Their analysis on the SPD is very wide of the mark. The SPD ceased to be a revolutionary party when it voted for war credits at the start of the First World War.

As for the rise of fascism, it goes on “By then the fixed-exchange mechanism had gone horribly wrong - in much the same way that EMU has gone horribly wrong - because the surplus countries were not recycling demand to maintain equilibrium. It had become a job-destruction machine. The result in Germany was the Reichstag election of July 1932 when the Communists and Nazis won over the half the seats. This leaves out the role of Stalinism which divided and betrayed the German working class with its policy equating the Social Democrats as “social Fascist” which divided the working class and paved the way for the fascists.

“Here is typically a lag-time between economic shocks and social fury. Luckily there is no Fascist threat this time. It is the (more benign) Marxist Left that stands to gain”. I am not sure what the meaning of benign left means but its boasting of the profile of ‘left’ groups is significant. It warns that Perma-slump has already chipped at the left flank of the ruling Socialists in Portugal. The Communist Party (PCP) and the Maoists and Trotskyists of the Left Bloc together won 18pc of the vote in September 2009, leaving Premier Jose Socrates with the lonely task of enforcing yet more austerity by minority government”.

The crisis has confirmed one thing that the groups the Telegraph calls the benign left are thoroughly bankrupt and nationalistic. Look at the example of Communist leader Jerónimo de Sousa who said that his country was being reduced to a "protectorate of Brussels", and that it was “cowed into submission by financial blackmail. The Telegraph reported that “He invoked the civil war in 1383 when the country rallied heroically to expel the foreign oppressor - with English help, the "ultimato inglês" as he calls it - from Portuguese soil”.

"It is not just the Communists who are worrying about this. There are a great numbers of Portuguese who are concerned that this country built over the centuries, for better or worse, on a foundation of sovereignty and independence is endangered by accepting everything that comes from Brussels without a trace of patriotism. The EU’s claim of economic and social cohesion is just propaganda," he told Publico.

The Telegraph article confirms the bewilderment of the ruling elite that has precious few answers to this crisis and that increasingly it has to rely on organisations such as De Linke for its analysis. The Telegraph gushes over the DeLinke organisation saying “It was refreshing to read "The Euro Burns" by Michael Schlecht, Die Linke’s economic guru, arguing that the primary cause of Euroland’s crisis is "German wage-dumping". He shows from Eurostat data that German labour costs rose 7pc between 2000 and 2008, compared to 34pc in Ireland, 30pc in Spain, Portugal, and Italy, 28pc in Greece and Holland, and 20pc in France. Again,”

De Linke along with other radical groups answer to the austerity measures is to promote Europe’s trade union movement whose solution is promoting  nationalism and pit worker against worker. A recent interview by Joe Monks, the general secretary of the European Trade Union Confederation (ETUC shows that the trade unions share the same nervousness as the ruling over the austerity measures.

He describes the current situation in Europe as “extremely dangerous.” He continues: “This is 1931, we’re heading back to the 1930s with the Great Depression, and we ended up with militarist dictatorship. I’m not saying we’re there yet, but it’s potentially very serious, not just economically, but politically as well.”

The article in the WSWS makes the valid point “As history has repeatedly demonstrated the defeat of working class resistance to attacks on jobs and living standards, far from preventing dictatorship, is the prelude to dictatorship. There is no “democratic” solution to the global crisis of capitalism outside of the revolutionary mobilisation of the working class to put an end to capitalism and establish socialism. To this Monks is unalterably opposed, and he speaks for the trade unions internationally. Given a choice between working class revolution and capitalist dictatorship, they will to a man choose the latter”.

As for the New Anti-Capitalist Party in France, the Left Party in Germany, the Socialist Workers Party in Britain, Rifondazione Comunista in Italy, and SYRIZA and Antarsya in Greece, say that any resistance to the cuts must be subordinated to the unions.

The World Teeters on the Brink of a New Age of Rage By Simon SchamaJune 03. 2010 "FT" -- May 22 2010 --By Ambrose Evans-Pritchard
European trade union head backs austerity

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