CWI Summer School: Economic, social and political crisis maturing together in Europe

The CWI School, which took place in Leuven, Belgium between 24 and 29 July, was opened by Peter Taaffe of the CWI’s International Secretariat on ‘Europe in turmoil, the youth revolt and the current stage of the class struggle’.

A turbulent year in Europe was featured in the introductory video, showing protests and strikes from Ireland in the west to Russia in the East, and from Scandinavia in the north to Portugal in the south. Peter began by commenting that those involved in these events and our times were fortunate to be participants in the struggle. We face the severest crisis for capitalism for 70 years. This included the many new members who have joined the CWI in the last year, some of whom were at the school, who will be helping to make history with the programme and tactics of the CWI. For the ‘older generation’ of CWI members the developments in Europe were the vindication of long-held perspectives, defended in adverse political conditions in the 1990s and the earlier part of this century in particular, that the working class would fight back when a capitalist crisis developed.

Peter mentioned how the ‘Murdochgate’ scandal had even involved the comrades of the CWI in Britain, with journalists contacting us and Tommy Sheridan, jailed for taking on News International, being defended by our comrades in Scotland and internationally. This whole episode highlighted just how rotten the capitalist state and its institutions – parliament, press, the judiciary and police included – were rotten to the core, another reflection of the crisis.

But the main body of Peter’s lead-off dealt with the economic catastrophe facing most of Europe and the reaction of the working class in those countries affected. Peter commented that the capitalists internationally fear ‘contagion’ throughout Europe as the eurozone melts down but there is nothing more contagious than the spread of revolution, which has been observed in the Middle East and North Africa this year, and is now in process in Greece and other parts of Europe through working-class action and the ‘indignados’ youth movement in many city squares.

The fact is that there is no easy way out for capitalism from this crisis following the 30 years of ‘financialisation’, which built huge debt mountains that are now holding back economic recovery. The crisis, said Peter, was systemic and not cyclical, and many capitalist commentators were saying the crisis was comparable to the 1930s – although Roger Bootle of Capital Economics believes there are more similarities to the ‘Long Depression’ of the late nineteenth century, a period of crisis of almost 25 years! These ‘worthies’ were drinking at the deep well of pessimism!

However, capitalism, Peter continued, would always attempt to find a way out of their problems on the bones of the working class. He illustrated this with a quote from a Greek woman protesting at the descending escalator of Greek wages: “How would you like to live on €300 a month?” she asked a TV journalist. As another symptom, mass unemployment is taking hold; the ‘peripheral’ eurozone economies worst hit by recession have 15-20% of the workforce unemployed, with youth unemployment in these countries around 40%! But non-eurozone Britain also has 850,000 workers who have been jobless for a year.

In reality, in most countries nobody has noticed the feeble ‘recovery’ of the capitalist economy following the crash in 2008-9. This means there will be no social stability. And the next set of problems is being prepared. The Financial Times recently stated: "Conditions for the next financial crisis are already in place. Debt remains at pre-crisis levels… In the US, private sector debt today is 2.6 times gross domestic product, and nearly twice the level reached after the 1929 crash."

Anger at the crisis has been reflected in the number of general strikes throughout Europe, with Greece having had 11 or 12 in the last year or so. Such is the scale of the collapse in Greece that the country is now dubbed the ‘Argentina of the Aegean’ – a sobering comparison to the crisis in the South American nation at the turn of the twenty-first century. Other countries have seen big strikes too.

In the magnificent struggles of the indignados, a complicating feature is the anti-party mood of sections of the youth occupying the squares – a reflection of the anger at the political system but also a condemnation of the labour and trade union leaders, most of who have sped to the right in the recent period. In such instances, the explanation of a genuine socialist programme is most important in winning the confidence of the young protesters.

In Greece we have big elements of a pre-revolutionary situation (see the report on Greece for further detail). Consciousness, the understanding of the period we are in and the tasks of the working class, which has been low since the collapse of Stalinism and the move to the right of the labour movement leaders in most countries, is beginning to pick up in the white heat of events in Greece and elsewhere. Our slogans, on non-payment of debt and nationalisation of the banks, were not picked up at first but are now established as the demands of the most thinking sections of the movement. This will be a testing period for Xekinima, the CWI’s section in Greece, but if the comrades formulate the right demands and use the correct tactics, then the influence of Marxist ideas in Greece could expand dramatically in the next period.

Peter praised the election successes of our Irish comrades in returning to the Dáil Joe Higgins and Clare Daly (both of whom contributed to the discussion by outlining how the crisis was hitting Irish workers and how that was feeding a huge desire for change) through the United Left Alliance, and our new MEP Paul Murphy, recently in Kazakhstan. Also, the movement was catching up in Britain, with the huge demonstration against the cuts on 26 March and, even more significantly, the pensions strike involving 750,000 public-sector workers largely led by the CWI members in the PCS civil servants union being a real turning point in events.

Peter gave a brief overview of the world economic situation. The ‘stimulus packages’ at the time of the recession mainly went into propping up the financial sector, unlike the New Deal in the US in the 1930s which went into public works investment. Yet the capitalists had rapidly turned from ‘stimulus’ to cuts mode and, at the time of the speech, the US political system was gridlocked over the budget and debt ceiling. Peter speculated on the possibilities that another round of quantative easing, ‘QE3’, might be resorted to by the Federal Reserve in the US as another desperate attempt to get the economy going. But stimulus packages cannot extricate capitalism from the mire it is in and will even pose new dilemmas for the capitalists. Even Germany, which had recently grown largely through exports of manufactured goods, will not be able to stave off problems forever. China had evaded a recession with a huge investment programme in the economy but this was stoking up a number of speculative bubbles which would burst with explosive consequences in the future.

So, as Trotsky once put it, the capitalists are ‘tobogganing towards disaster with their eyes closed’. Theirs is an economic, social and political crisis all maturing together, creating the conditions for revolutionary upheavals. But for the working class to be successful, mass socialist organisations are needed that have clear ideas. That is because the ex-social democratic and communist parties have vacated the scene, while some of the new left organisations like Syriza in Greece or the Left Bloc in Portugal have, perversely, moved right as the crisis has deepened. The experience of the Socialist Party in Ireland, through its leading participation in the United Left Alliance, will be vital in establishing an example for new formations in the future.

The school met following the ‘deal’ which had attempted to stave off a catastrophe for the Greek capitalists by a default. Effectively, this was a selective default. But the deal would mean a catastrophe for the working-class. and, after initial favourable comments, the markets were becoming increasingly sceptical that the deal could either stave off default or prevent ‘contagion’ spreading to Portugal and Ireland, or even Spain and Italy, whose economies were coming under increasing pressure from the markets. Some sort of eurozone collapse was on the cards, which the CWI had suggested from the euro’s inception was likely but which had been delayed by the world upswing. Now in a recession and crisis, the eurozone was beginning to break apart. It was a systemic crisis of the euro and one from which they were unlikely to recover. The euro may come out of the crisis existing only in a core area based on Germany but dreams of an opportunity to promote greater European fiscal or even political unity, even supported by British Chancellor of the Exchequer George Osborne, were just pipedreams as national parliaments and electorates asserted their doubts and opposition to further bailouts in the eurozone.

In the discussion, Arne from Rättvisepartiet Socialisterna, the CWI section in Sweden, questioned whether the euro would break up immediately and that the deal might give Greek capitalism some breathing space for a period. He also quoted an FT article which suggested that the eurozone crisis would drive the project for greater integration while sapping the support of the populations for the same goal. But Bob Labi of the CWI International Secretariat conceded that while the IS had been wrong on the timing of the collapse of the euro, it had been correct to point to the probability that it would be undermined by clashes of national interests. Robert reminded the school that some comrades had suggested at the inception of the euro that it would only be broken by a European-wide revolutionary movement, which was not yet the situation. The euro had been damaged by, in particular, the collapse of the financial bubble Europe-wide in 2007-8 and its effect on the banks and governments. The deal might prevent an imminent collapse but would not stave off further contortions of the euro. The deal may not stave off further defaults or countries leaving the eurozone. And Tony Saunois of the IS, in his reply to the discussion, quoted Wolfgang Münchau of the FT who had suggested that for the deal to be effective, Greece’s national debt should have been halved and not ‘shaved’ by a mere 12 percentage points. This ‘deal’ will still have devastating consequences for Greece and the working class.

Peter reminded the school that although the general flow of the events was in our direction, reaction would also be present in the shape of the far right in Europe. Marine Le Pen had made radical sounds since taking over as leader of the Front National in France – she could even beat Sarkozy in next year’s presidential elections and get into the run-off – and other far-right and populist parties had also made headway. The dangers of the far right have been underlined in recent days in the terrible events in Norway. But there was little chance of the far right taking power in a European country because of the working class’s memory of history; however, the far right’s forces could be used as auxiliaries in counter-revolutionary movements in the current crisis.

But Peter also was clear in his conclusion: the tide of history was now in the working class’s and the CWI’s favour. This does not mean that there will not be defeats and reversals for the working class but that the upswing in activity, the beginning of a rise in consciousness amongst workers and youth and the deepening of the crisis will all shape the next period. Capitalism has no answers other to savagely hold down the living standards of the working class. If we learn from the working-class movements that will rise, and with the correct programme, perspectives and tactics, Peter was confident that the CWI would grow in numbers and influence and would make the socialist transformation of society a popular aim for workers and youth in the next period.

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