Europe's crises

After the fall of the Berlin Wall in 1989, a well-orchestrated chorus proclaimed the end of history and capitalist eternity. History, as if offended by such silly predictions, quickened pace and today nobody will seriously contend that everything is for the best in the best all of possible capitalist worlds. On the contrary, we are obviously living in a time of deep crisis. The rapid capitalist invasion of Eastern Europe, nicknamed shock therapy, is meeting serious resistance, illustrated for instance by the need to bomb Parliament in Moscow, and is provoking popular discontent, expressed most recently in the Polish election.' The making, or remaking, of a capitalist class within years, and not decades and centuries, proves a more difficult exercise than was assumed.

Prospects are not bright on the western front either. The twin debate on the necessity to radically reduce the working week and the imperative to deprive the workers of safeguards conquered in past battles, in the name of "flexibility" imposed by the international market, show the growing awareness that mass unemployment in Western Europe is not a transient phenomenon, a phase in the trade cycle, but a structural problem and a striking expression of the contrast between our technological genius and the foolishness of our social organization. While stretching over the planet, the reign of capital is revealed in its nakedness. It may even be reaching the end of its tether. But there is nobody to push it off the historical stage. The left, looking back nostalgically to the postwar years of unprecedented expansion, still dreams of social contract or historical compromise, and seems totally incapable of inventing a radical alternative. The bankruptcy of Social Democracy follows the total collapse of neo-Stalinism.

It is these three closely connected crises that I shall try to analyze today, a subject so vast that I must at once make two qualifications. Firstly, though in our increasingly deregulated world the crisis is obviously global, I shall stick to Europe, partly because we have sessions to deal with other areas, largely because, in any case, I must pack so much in less than an hour. Which brings me to the second point, the inevitably compressed nature of my argument. I apologize in advance for what may look like the sin of the journalistic profession, which first oversimplifies and then exaggerates.

1989 does mark the end of an era, but the end of what? Certainly not the end of socialism, as it is being suggested with an obvious purpose, because you can only bury the previously existent. I would say the final end of a Marxist tragedy, which began when the Bolsheviks tried to find a shortcut, rifle in hand, into the future. As all Marxists at the time, they did not believe they could build socialism on their own in backward Mother Russia. But, the revolution having failed to spread, they had the choice between surrender and a holding operation. The immensity of their task was summed up in the contradictory nature of its definition - primitive socialist accumulation.(1) Whether a regime of bloody repression and Byzantine cult, in other words Stalinism, was its inevitable political counterpart is a subject we can leave to another conference. The mechanism functioned in a way as long as the economy remained primitive and labor as well as natural resources freely available; the breakneck industrialization did enable the Red Army to defeat the Nazi invaders. Let me add at once that this system of command from above, designed for semiliterate muzhiks, had nothing to do with socialist planning and was rapidly rendered obsolete by the progress of the economy. Stalin's successors were aware of it. But they were also conscious that the changes needed to reform the system threatened their privileges. They wanted Stalinism plus security of tenure. Nikita Khrushchev, whose half-hearted efforts endangered their position, was thrown overboard. Leonid Brezhnev, who preserved their privileges, stayed in office for eighteen years. The price of that stability was stagnation. With production slackening pace and the military burden growing, the neo-Stalinist system was, in historical terms, doomed.

This brief summary is simply to say that perestroika was an attempt by the ruling establishment to perpetuate its reign by changing the method of management and the manner of extracting surplus. It in no way diminishes the historical merit of Gorbachev, who grasped that economic change requires political reform, or the excitement of the first years of glasnost as the frontiers of freedom were being extended and the nation was recovering its memory. Yet it was reform from above, affecting the people rather than involving them as actors in this transformation. For a spell, Gorbachev gave the impression that, since the workers were likely to be the first victims of the reform, he would try to win their active support, but he quickly gave up the attempt. Thus, he found himself without a constituency when the privileged sections of the intelligentsia, the priviligentsia, deserted him to climb on Yeltsin's bandwagon, assuming that it would take them more rapidly towards a capitalist society.

The battle, naturally, was not over. It was no longer one between apparatchiks and managers over the shape of society. It was an inner struggle within the establishment over the pace, and therefore the ruthlessness, with which capitalism was to be introduced. And a bitter one because it now involved power as a means for distributing property and property as a future source of power. To suggest, as our ministers and their spokesmen have done, that this conflict between President and Parliament, which reached its first bloody climax last October, was one between "democrats" and "ex-Communists" is too ridiculous to be taken seriously. (Thus the party boss of Sverdlovsk, the arch-apparatchik Yeltsin is a "democrat," whereas the Parliamentary leader Ruslan Khasbulatov, who had a party card like almost every professor, is an ex-Communist.) This sounds like a joke. But can one seriously distinguish the dividing line?

At the risk of oversimplification, it is possible to put on one side the advocates of shock therapy, whose most articulate spokesmen are Yegor Gaidar, the Deputy Prime Minister and now leader of Russia's Choice or Boris Fedorov, Minister of Finance.(2) They and their supporters can only gain if the present system is smashed, if on its ruins they can set up new enterprises or buy the broken ones at bargain basement prices, with the help of foreign capital or of domestic speculators. Their opponents, mainly managers of big enterprises, are best described as the caretakers, rather than the defenders of, state property, since they hope to take over these firms, after a spell of state capitalism. For this reason, they don't want them to be smashed or sold on the cheap. This managerial lobby is linked with Arkady Volsky's Union of Industrialists, which was at the heart of the centrist Civic Union, and the Prime Minister, Viktor Chernomyrdin.

The frontiers are not clear-cut. It may, for instance, be objected that Yeltsin the pragmatic is essentially in favor of his own survival. His camarilla, however, known as the collective Rasputin, did put its money on shock therapy. Similarly, on the other side, the Civic Union did split as the conflict with Yeltsin drove Aleksandr Rutskoi into an alliance with Stalinist and jingoist diehards. (Here, I would like to make a brief digression. My strong condemnation of the so-called democrats with blood on their hands in no way implies an approval for their opponents. As Heinrich Heine used to say: alle beide stinken, both sides stink. I only resent that one of the stinking sides is being presented to us as Chanel Number 5.)

Yet was it necessary to smash Parliament, write a constitution made to measure establishing a presidential monarchy, and force Western propaganda to proclaim in Orwellian Fashion that dictatorship is democracy? To prove that an iron hand may be required to impose capitalism at breakneck speed, we shall look at neighboring Poland, the pioneer and model of shock therapy.

Lobsters, say French cookery books, love to be boiled alive. According to the preachers of the capitalist gospel, the people of Eastern Europe love to have their living standards cut. Lobsters don't vote. East Europeans do. Last September, the Poles, described as happy patients cured through shock therapy, surprised the world by voting out the coalition connected with that treatment and voting in two parties linked with the ancien regime. They obviously did not vote for long lines or for censorship. If there was any nostalgia it was for a world, however unattractive, in which you did not fear for your job, for a place in hospital, for the education of your children. Having four years earlier rejected what was known as socialism, they were now voting against "really existing capitalism," at least in its version for Eastern Europe.

Naturally, there were specifically Polish elements in this election - the humbling of the Catholic Church or the end of the saga of Solidarity. Yet the most significant for Eastern Europe as a whole was the vote against the Balcerowicz plan, that is to say, the shock therapy prescribed by the international financial establishment. The parties connected with that policy captured about one-quarter of the vote. This roughly corresponds to the estimates of the proportion of people who are not worse off than before, indeed some of whom are incomparably better off. The bulk of the Poles voted against the sharp drop in living standards, against attacks on the welfare state, against growing inequality, against the arrogant power of money.

The result was so striking because Poland did present particularly favorable conditions for the application of shock therapy. Its farming was dominated by smallholders and there was quite a lot of private enterprise in trade. Above all, Poland was the only country in the area where the transition was being carried by a really popular movement. Lech Walesa was no apparatchik. He was a genuine resistance hero surrounded by similar underground figures. When they told the workers there was no alternative, they were listened to, at least for a time. Now Solidarity was paying the price of its betrayal and Poland was proving the long-term incompatibility between shock therapy and a democratic regime. And what was true of Poland was even more so of Russia, which has no Solidarity, where discontent is high, though restructuring has not yet reached its painful stage, that of mass unemployment. If you try to introduce capitalism there by shock tactics you need a czar, even if you baptize him democratic.

Before we move westward, let us recapitulate. We are witnessing in Eastern Europe something unprecedented, the attempt to create a class of property owners almost instantly. The interests are still very far from crystallized, the numerous parties trying, inadequately, to represent classes in the process of formation. Two factions within the ruling establishment are fighting for power and property. The rest of society, and notably the workers, are groping for position. They are, to use Marx's expression, classes in themselves but not for themselves. And, with socialism discredited, there is no genuine left to provide them with a purpose. All this in an explosive climate of social strain and enormous corruption.

Providing the background for Western Europe should take less time. The thirty years or so after the last war in this area will go down in the books as a period of unprecedented growth and of profound social transformation, particularly deep in countries like France or Italy, where the industrial revolution had not gone as far as in Britain or Germany. Those were the years of the vanishing peasant, of mass migration from country to town, and, this not being enough to satisfy the demand for labor, of mass immigration. It was also the period of rapid and regular rise in living standards, as measured in material terms, changing completely the patterns of consumption. Ideologically, it was the era of the "end of ideology," of the assumption that capitalism had found the secret of eternal youth, that the vagaries of the cycle were insignificant and unemployment, merely frictional, a marginal phenomenon.

But the fairy tale did not last. By the mid-seventies came the time of restructuring. Our own perestroika, we were assured, was only provisional, affecting such traditional sectors as coal, steel, and textiles, with the services absorbing the surplus labor from manufacturing. Which they did for a time. Then, the same causes - the search for profit and the spread of automation - produced the same effects in banks and other offices. Unemployment climbed, the provisional becoming permanent.

Ideology coming to the rescue, the eighties saw the international fashion of Thatcherism as well as the glorification of von Hayek and Milton Friedman. They also witnessed the spread of deregulation and the extraordinary expansion of international finance. The daily foreign transactions have now reached the astronomical level of one thousand billion dollars, the equivalent of all the gold and foreign currency reserves of all the countries belonging to the International Monetary Fund. Even allowing for double accounting, this is tremendous and reveals the weakened position of national governments when faced with such a mass manoeuvre. Within the European Community moving towards a single market, this trend was reinforced by the drastic reduction of the powers of the individual nation states without a corresponding increase in the powers of a European state, as if capital decided to reign without proxy.

Another development must be mentioned, though it seems too close to draw definite conclusions from it. I mean the end of the Cold War and German reunification putting an end to the alleged or real dependence of Germany on the American nuclear umbrella. Has Western Europe thus gained its unifier? Will the new Germany perform for the Common Market the role Prussia once played within the Zollverein? Can Western Europe stand up to the United States without evolving a different kind of society? I have my doubts on the matter, but this is a subject for another discussion. Here it is enough to recall that reunification was one of the mainsprings behind the Maastricht Treaty, designed to harness the united Germany to the western union. The treaty itself was the logical completion of the whole process of integration, with the common currency and an independent central bank asserting the direct rule of money, while the meager social chapter confirmed that the rules would not be equal for capital and labor. The ratification process, with the awkward referenda in Denmark and France, revealed a surprising level of resistance, both nationalist and social, towards this Europe of big business. It certainly slowed down the march without really changing the direction. Maastricht and its convergence targets - for inflation, the public debt, the foreign deficit - has also been used to impose a deflationary policy in member countries. In Italy, for instance, this pressure has been a crucial factor in precipitating the tremendous political upheaval, which is still very far from finished. Italy, however, is only the extreme case and not the exception. Throughout Western Europe we are probably moving towards a political confrontation, with the problem of employment, or rather unemployment, at the heart of the conflict.

Understandably so. Within the European Economic Community the share of unemployed is averaging nearly 12 percent and almost double that figure, say, in Spain. And these are official data underestimating the real plight, which has come to stay. For a long period now, the boom years of the cycle do not bring about a clear recovery in employment, they merely interrupt for a while the relentless lengthening of the lines of the jobless. The phenomenon is no longer limited to the young, to the women, to the blue collar workers. It affects the whole population, including the middle classes. This may explain why it now hits the headlines of the European newspapers. What do you say of a system that can be fuelled by military expenditure but cannot expand through increased spending on housing and health, culture and education? Something must be basically wrong with a society when you cannot tell whether an increase in productivity is a blessing or a curse.

A drastic reduction of working time is now the topic of debate and there is no doubt that we have the technical means for such a reform. Indeed, some writers connected with the ecological movement, Andre Gorz being a good example, have grasped the nature of our predicament, pointing out that we are at the stage, described prophetically by Marx in the Grundrisse, when "the theft of somebody else's labor time, on which wealth now rests, appears a miserable base" compared with the means at our disposal. To take "working time as the standard of wealth, Marx argued, is to base wealth on poverty ... reducing time as a whole to working time and degrading the individual to the simple role of the working man, dominated by his labor." What in Marx's day was utopian is now realistic. If we take the advanced Western countries in isolation (which obviously one shouldn't, but I do here for the sake of the argument), we are already today technologically ripe for a transition towards a qualitatively different society in which, as he put it, "the surplus labor of the masses will no longer be the condition for the development of general wealth as the leisure of the few will cease to be the condition for the full development of the human brain."

And yet, in my opinion, even the writers aware of the nature of the new confrontation do not seem to go far enough. Because the time required to ensure the production for our material needs can be drastically reduced, they assume that one can leave that production in capitalist hands, obtain a dramatic cut in working hours through some mysterious legislation and thus allow society to organize itself differently. The snag is that capital has its logic and, if its reign is perpetuated in the factory and in the office, it will also prevail in society at large. The struggle is, therefore, over the form of organization and democracy from the shopfloor to the very top.

The way in which the talks over a shorter week-whether four-day, thirty-five, thirty-two, or thirty-hour - are carried illustrates the point. This is not the case of the labor unions imposing greater leisure and more choice for their members. It is the case of employers imposing, when it suits them, a shorter week with lower pay on reluctant employees, forced to accept a smaller pay packet in order to reduce the number of sackings. It is an attempt by the employers to pass on the cost of the crisis to the workers. Whether (on the national scale) they will really cut drastically the hours worked may be doubted, judging by precedents. Productivity has risen tremendously compared with prewar, the working week has gone down imperceptibly. The French workers, for instance, conquered the forty-hour week back in 1936 during the popular front and it is only now that they are supposed to dip below the thirty-nine hours. The manner in which the EEC adopted last month the rule that a forty-eight hour week is the maximum to be tolerated, with Britain protesting in the name of the "right to work" - translate: the right to be exploited - increases my doubts.

What is certain, on the other hand, is the employers' determination to get compensation for any reduction in the hours worked. They are trying to recover the concessions they were forced to make on their right to hire and fire. They want to weaken still further the power of the unions and of factory delegates, eliminate the minimum wage, and, following in Reagan's footsteps, spread the number of "working poor." This, allegedly is the way to create jobs. But "wage flexibility" is not enough. Allegedly, Europe to compete and survive must cease living above its station, with a welfare state, a publicly paid universal health service, and other safety nets. This is why the coming confrontation is so vital. What is at stake is whether the working people of Europe will be more than ever appendices to the machine in a society based on profit or whether the associated producers, imposing a different logic, will start gaining mastery over their work and the organization of their society.

The crisis of the left was implicit in all that has been said so far. The collapse of the neo-Stalinist model (which should never have been connected with the left and had ceased to be so for some time) is too obvious to require comment. All one can say is that, because of verbal association, the regime has discredited the very word socialism for quite a period. That period, actually, may prove shorter than we thought as the people of Eastern Europe discover that life under capitalism is not as dazzling as suggested by the American serials, that the future they are being offered is neither British nor Swedish but Bolivian. It is to be hoped that the shock will spur them to seek a third way and not to look nostalgically towards the past.

The bankruptcy of the Social Democracy cannot be so taken for granted, even - especially - now that the Swedish Social Democrats, the French Socialists, and the British Labor Party are out of office. But first a word of definition for a concept with a very shifting meaning. Even between the two world wars, that is to say after the break-up of the Second International, the Social Democrats, at least in theory, still believed in the social ownership of the means of production, that is to say the abolition of the capitalist system. They simply claimed that this could be achieved gradually within existing institutions. Things have changed totally since the war. The French Socialists in 1981 were probably the last ones to pay lip service to a "break with capitalism." Actually, for a long time, the Social Democrats had become the reforming managers of capitalist society and the problem now is with the adjective reformist.

The evolution of Social Democracy had a great deal to do with the period of unprecedented prosperity mentioned earlier. Those, you remember, were the years of fast rising wages and an expanding welfare state. With the national product rising rapidly, part of the profits could be passed on to the workers and why change the system within which you can make substantial progress? Indeed, with the illusions about Russia as an alternative shattered - after Khrushchev's indictment of Stalin, the invasion of Hungary, and the crushing of the Czech Spring in 1968 - even the Communist Parties, headed by the Italian, got converted to the doctrine of capitalism as the only possible horizon.

The snag was that they opted for the so-called "historical compromise" when it had ceased to correspond to the historical phase, when the foundations on which it had rested were crumbling. A compromise is a matter of mutual concessions and the labor movement could claim quite a number of achievements. Now it was to be all give and no take. While the left, moving towards the center, was opting for class collaboration, the radicalized right issued a call to class war. The position was particularly awkward for parties in office. The French Socialists took over in 1981 full of projects for reform. Two years later they were the staunch defenders of the franc, leading the country into mass unemployment in the name of financial orthodoxy.

The failures of the European labor movement can be easily documented. The dramatic drop in union membership is not only due to the restructuring of its strongholds in coal, steel, or the shipyards. For years the leadership of the unions failed to take into account the fast changing structure of the labor force, the massive inflow of women and immigrant workers. Then, accepting the logic of the employers, it was always on the defensive and, in the present crisis, it seems cornered. In addition, if it sticks to national boundaries, while capital moves across frontiers, it is doomed. The political shortfalls of the established left, of what the French call la gauche respectueuse are even more obvious. It is enough to recall that all the genuine movements of the last quarter of a century - the youth rebellion of 1968, women's liberation, the ecological movement - have grown outside the traditional left and often against it.

And yet the word bankruptcy may have been too strong or premature. A more accurate image for the state of the western left would be one in which all the elements of insolvency have been gathered but the final warrant has not been signed. The current crisis could seal its fate. Now, to preserve the compromise it must accept the attack against all the postwar conquests of the working class, including the welfare state. No wonder that in recent months the British Labor Party, the French Socialists, the former Communists of the Italian PDS have asked themselves whether they should not follow the model of the American Democratic Party. The question is whether in their relationship with the system the left-wing parties are still negotiating partners or mere transmission belts.

The European left is at crossroads. A quarter of a century ago, amid much turmoil, the protest movement raised a series of key questions: growth? but which growth? for whose sake? for whose profit? for what purpose? for what kind of society and within which environment? It did not answer them, let me insist, it only raised them. These are questions that the left must put back on the agenda in search of a real alternative. Otherwise the left, in the traditional acceptance of this word in Europe, will disappear as part of the Americanization of our continent.

Before concluding I still have time for a few remarks:

If rational, progressive, universalist solutions are not offered, irrational, reactionary, and jingoist ones will take their place. It is already happening, with the rise of Le Pen's National Front in France, of neo-nazis in Germany, of the Lombard League and now the neofascist MSI in Italy. The seriousness of that danger is connected with the gravity of the economic crisis and this is why I am even more perturbed by the prospect of nationalist revival in Eastern Europe, where not oBly living standards have dropped but the whole social fabric is torn.(3) Echoes of bloody battles from the confines of the ex-Soviet Unio , from the Caucasus to Tadjikistan, are a reminder that horror is not limited to Yugoslavia, that it can spread.

Secondly, what happens in one half of Europe has an impact in the other. In the 1980s the reactionary winds blowing from the West and the East reinfo ced one another. I am convinced that if the leadership of Solidarity could convert, eight years later, a movement which started in 1980-1981 as an egalitarian expression of the working class into a sort of Robin Hood in reverse, robbing the poor to give to the rich, it had something to do with the Thatcherite influences coming from the West and the failure of the Mitterand experiment in France. It is to be hoped that the opposite will also prove true, that progressive trends will also reinforce one another and, in particular, will help the East Europeans to search for a third way. What both sides need at the moment is no new model, heaven forbid, but an example, a proof that we are not living in a world without alternative.

It is the logic of our time

No subject for eternal verse

That we who lived by honest dreams

Defend the bad against the worse...

Thus the British poet, Cecil Day-Lewis, some time after the first war. The message, however, fits our time. We vote for Labor against Tories in Britain, for the left against the right in France or Italy with a bitter taste in our mouth. Did you notice in your struggle over NAFTA, as we did over Maastricht, how easy it was to find oneself with strange bedfellows, how important to put one's opposition in its context, to couple the rejection with a proposal based on entirely different premises. What the left now requires above all is such a global project, a vision of the future, what I would a call a realistic utopia. After so many pledges broken and dreams shattered, no movement will now embark on a long, historical journey without knowing where it is aiming at and how it hopes to get there.

How can such a project be elaborated democratically, and not handed down as a blueprint for obedient rank-and-file, what should it contain, what agonizing reappraisals will it involve - all these questions go well beyond my present purpose. They are not particularly European. They are universal. They are part of our common, unfinished struggle for a radically different society. And so I shall conclude with a warning. Ours is a race against the clock in a double sense. We must stage holding operations, prevent the worst from happening and thus blocking the horizon. We must also use the time thus gained to allow the social forces to reawaken politically and to reinvent an alternative. Only thus shall we be able to avoid a barbarian future.

NOTES

(1.) And confirmed by the December poll in Russia, when the committed advocates of shock therapy regrouped in Russia's Choice headed by Yegor Gaidar obtained 15.4 percent of the national vote in the elections to the Duma. (2.) Since then, as the result of the election, they have both resigned from the government. (3.) The 22.8 percent of the vote in Russia's December 1993 election by Vladimir Zhirinovsky's jingoist, xenophobic "Liberal Democrats" is a symptom of that danger.

Daniel Singer is the European correspondent for The Nation and a long-time supporter of, and contributor to, Monthly Review. Aversion of this paper was delivered at the International Seminar, "The World Today: Situations and Alternatives, in Mexico, in December, 1993 and also appeared in Transitions to Democracy in a World Perspective, No. 5, January 1994.

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