Working Class Responses to the Crisis

KC JOURNAL NO 22 July 2009

In this article Ighsaan Schroeder identifies trends and tendencies within working class responses to the global capitalist crisis

As financial markets continue to slump around the world, angry students and activists gather in the City of London to voice their anger over the British governments plan to commit over 50 billion GBP of public funds to shore up confidence in British markets.

Working Class Resistance and the Future of Capitalism

The most notable feature of international working class response to the global capitalist crisis has been its relatively limited nature. This says much about the on-going weakness of the working class movement internationally, dating back to around 2004, after the rise of the anti-globalisation movement from roughly Seattle in 1999. The limited response is all the more significant when viewed against the scale of dismissals, with millions of jobs lost, the routine introduction of short time alongside lengthened working hours in other cases, wage cuts, cuts in social spending, and a generalized assault on working class living standards as the ruling classes everywhere attempt to shift the burden of the crisis onto the working class.

By a limited response we refer not only to the scale or number of incidents of working class struggles; more critically, we refer also to the character and depth of such struggles. Simply put: are working class responses an attempt to ameliorate the worst excesses of the crisis or is the working class, in the course of resisting the pretensions of the ruling classes, at once also beginning to directly challenge the capitalist system itself? Often in discussing working class responses comrades are quick to point to various instances of struggle as proof that the working class is indeed struggling. As we will show in this article, there has been no shortage of working class responses internationally. However, the discussion here is not about whether the working class is resisting or not. Instead, an attempt will be made to examine the political character of such ‘struggles’ in order to arrive at a clearer sense of the current relation of class forces internationally and what this suggests for the future of capitalism in general and the neo- liberal model of capitalism in particular.

The question of how the working class is responding is critical to whether (1) the capitalist class will succeed in shifting the crisis onto it, and (2) tied to this, the capitalist class is able to reconfigure class relations sufficiently to return to a more stable regime of capital accumulation, either within the existing neo-liberal framework of accumulation or some new capitalist variant.

The Capitalist Class Attempts to shift the Burden

The capitalist class has responded to the generalized capitalist crisis by a series of measures aimed at ensuring continued profitability. One of these measures has been nationalization of banks, which has simply allowed the state to funnel the tax monies of the dominated classes into the vaults of the rich. For example, the AIG bosses refused to give up their bonuses, while the US Treasury is unable to say where at least half of the first bank bailout tranche of $700 billion has gone.

Another measure has been the dismissal of millions of workers. In all the leading imperialist countries, unemployment is at its highest since World War II. In the US, whose productive economy has not been as hard-hit as its European counterparts, unemployment is currently at 9.5%. The International Labour Organisation estimates that 51 million jobs will be lost due to the crisis. The World Bank estimates that 90 million people will die as a direct result of the crisis and that the world’s poor will increase to a billion. In addition to mass retrenchments employers have also routinely resorted to short time, leading to falling wages and more poverty.

State responses have been characterized by their exclusive orientation towards solving the problems of the capitalist class. In cases where the working class has been able to wrest some concessions over issues such as limited job guarantees, as in France, this was the result purely of militant mass struggles. In addition to ‘nationalising from the right’, states around the globe have further reduced their social services expenditures. This has taken basic social services out of even further reach for the majority and is compounding the headlong descent into poverty for larger and larger sections of the working and also middle classes. This appears to be the case particularly in Eastern Europe.

In Lithuania, Bosnia, Bulgaria and Latvia, state cuts in social expenditures have been pronounced, in some cases to qualify for further IMF loans, no doubt with which to further bail out their capitalist classes. In some instances national and local states have cut social services alongside giving tax breaks to the rich, as in California. Public sector workers have in many cases borne the brunt of such cuts and are not surprisingly in the forefront of some of the global resistance.

It is clear that some capitalists have used the crisis as a cloak to drive back the working class, regardless of the effect of the crisis on them. The French company Total, for example, retrenched a large number of workers in France despite declaring record profits. At Continental Tyres, also in France, workers agreed to move back to a 40 hour week, a long-standing demand of the French bourgeoisie.

At Caterpillar France, the company attempted to abolish all limits on working time.

Working Class Responses

As mentioned earlier, there have been widespread working class responses to the attempts by the capitalist class to make it pay for the crisis. These have included countries with rich traditions of working class struggle, such as France, through to countries with much less of such tradition, such as Iceland and Switzerland. Resistance has ranged from east to west, including even a factory occupation in the US, and a resurgence in the Japanese Communist Party, despite (or because of) that party’s stated intention now still to merely reform the capitalist system and not overthrow it. Interestingly, there has been much resistance in Eastern Europe. The Eastern European working class has been almost completely absent from the anti-globalisation stage for much of the past decade. Now, in countries like Latvia, Bulgaria and Lithuania it has come out in large numbers against state budget cuts, especially public sector workers. In general though, the scale of resistance, its depth and political character does not match the scale of the bourgeois offensive, let alone begin to challenge the bourgeois order.

Trends and tendencies in Resistance

(1) Intensified Class Collaboration

In countries with a long history of class collaboration, such as the UK and US, the obvious collapse of the capitalist system has not led to a radicalization among sections of the working class traditionally associated with this brand of politics. Thus, at GM workers have been calling for a ‘Buy American’ campaign as their solution to the crisis, effectively committing to resolving the crisis together with their bosses. The workers’ union, the United Auto Workers (UAW), has in fact bought shares in the restructured company. In Britain too, sections of the working class there have been calling for a ‘Buy British’ campaign and in both instances it is not difficult to see how this will also fuel xenophobic sentiments, with calls for ‘foreign’ workers to return home.

(2) Militant defense #1

The struggles of workers in Eastern Europe including Hungary and the Czech Republic, public sector workers in California, the G20 demonstrations in London and the various militant May Day rallies in Germany, Turkey and Spain fall into this category, as would struggles in Iceland, Switzerland and Russia. These struggles are marked by militant actions in defense of wages, jobs and social services and, in some cases, the state’s handling of the crisis. To that extent, none of them were struggles for the overthrow of the capitalist system itself.

In Lithuania and Bosnia the working class protested and demonstrated against cuts in social spending, while in Latvia thousands protested budget cuts and reductions in state salaries and pensions. In Bulgaria workers protested government failure to protect jobs. In California, public sector workers have come together in the United Public Works for Action (UPWA) and have forged a broad alliance with students, housing activists, environmentalists, immigrant rights organizations and civil rights organizations to resist wage reductions in the public sector, cuts in wage sector strikes and reductions in public services.

This response comes in the wake of failed public sector union attempts to rely on the Democrats in the legislature to defend workers and lobbying to have ‘a seat at the table’. In Puerto Rico unions have formed a strong alliance which includes pro independence, community, religious, environmental and left organizations to resist state dismissal of 10 000 public sector workers. Here rank-and-file militancy has forced the more conservative, US affiliated unions to join in the alliance.

May Day rallies in Turkey, Spain and Germany, among others, witnessed big, militant protests, in some cases much bigger than in recent years, with banners and posters reflecting a clear rejection of efforts by the capitalist class to shift the crisis onto the working class. Demands included pay increases and job protection. In Iceland a series of protests, some violent, led to the collapse of the government after the country’s banks crashed. Switzerland saw protestors at the World Economic Forum in Davos expressing a vote of no confidence in the capitalist class to solve the crisis it had created. In London, the G20 meeting to consider co-ordinated measures to deal with the crisis witnessed large protest actions in the days leading up to the meeting and on the day of the actual meeting. One of the key demands of the G20 march was for democratization of financial institutions.

Militant defense #2

The response of the French working class has been interesting, and worthy of distinction from the responses noted above. Through two general strikes, one in January and one in April, the latter bringing out as many as 3 million workers, it has managed to wrest definite concessions from the right-wing Sarkozy government. These include $3.2 billion in extended unemployment benefits, tax breaks for the poor and a once-off payment of $650 to unemployed youth who did not qualify for normal unemployment benefits. Sarkozy’s bailout of motor manufacturers was also made conditional on there being no job losses for the next 3 years. This is obviously a different response to the American autoworkers.

In addition to the general strikes, the French example is also significant for the nature of some of the other struggles the working class has engaged in. Workers at Sony and 3M kidnapped their bosses in reaction to job cuts and held them captive until their demands were met. At Continental Tyre the workers invaded management offices, pelted management with eggs and later ransacked the offices of the local representative of the national government when their efforts to halt a plant closure failed. The workers also held a joint demonstration with their German comrades from Continental faced with a similar threat. However, this is one of very few examples of such cross- border solidarity among workers in Europe.

Significantly, at Caterpillar, where the company threatened to cut 733 jobs, workers rejected outright a deal brokered by their union, which is affiliated to the CGT, itself politically aligned with the French Communist Party. The deal included reduction of job losses to 600 and agreement by the workers to unlimited working hours. The workers demanded that negotiations take place in the plant in future and that they would determine the terms of the negotiations. As one writer comments: “A defense of jobs, of industry, and of living standards now entails a militant and political struggle against not only the bosses, but against the trade unions…”

The French experience is important because the militancy of its responses, from the general strikes through to the ‘bossnappings’, while by no means revolutionary, have undoubtedly best defended the working class there against the excesses of a capitalist class faced with crisis. But even there, in a case where the working class has responded in a most militant fashion, the relatively unchallenged position of the ruling class is clear, as is its ability to shift the crisis onto the working class. Against the $3.2 billion given to the French working class, the state has given $33 billion to the capitalists. The oil company Total has had the confidence to declare record profits and cut jobs at the same time. And despite the ‘bossnappings’, in the case of Continental at least, workers have had to agree a 40- hour working week.

Still, 69% of the French people supported the January strike and 74% the second in April, while one national poll indicates that the leader of the New Anti Capitalist Party, the Trotskyite postman Olivier Besancenot, is widely regarded as the only credible alternative to Sarkozy. This suggests that, in France at least, the class struggles around the current crisis are far from resolved.

(3) nationalisation from Below

In 2002 workers in Argentina started taking over companies that had closed as a result of the crisis that hit that country in 2001. These takeovers, under the slogan of “Occupy, Resist and Produce” led to around 200 worker-controlled businesses. Since then the workers have had to struggle to retain control in the face of severe state and capitalist hostility.

The current crisis has naturally also affected Argentina, and since October 2008 50 000 jobs have been lost. The crisis has also impacted on the FASINPAT (factories without a boss). In some cases factories have been faced with 40 to 50% drops in sales. One of the factories, Zanon Ceramics, has seen a dramatic drop in production. In 2006 the plant produced 400 000 square meters of ceramics per month. Currently it is producing only 150 000 square meters per month. In response the workers have shortened production shifts. They have refused to retrench anyone. This is the approach taken by most of the worker-controlled companies.

Despite these difficulties 2008 saw a new round of factory takeovers in response to the crisis, with workers taking over up to 10 new factories. Employers used the crisis as an excuse to pay off debts, often closing factories, dismissing workers and liquidating factory assets, only to start up production again in a new guise. In some cases workers responded with takeovers. And it appears that the workers from the 2002 round of takeovers have been providing important advice to the newly ‘recuperated’ factories.

A worker from the Hotel BAUEN says: “The recuperated enterprises are working to change society. We are changing the way of working, working without exploitation and show workers that we can function without bosses.” While the Argentinian experience of factory takeovers may hold important lessons for the working class elsewhere, the problem is that not even the Argentinian working class has been able to appropriate and generalize it as a method of struggle.

Conclusion

This article does not pretend to have examined every major working class response to the crisis internationally. There may therefore well be important battles that have not been mentioned or overlooked, such as in Greece and Gaudeloupe. Nonetheless, we do not believe these will qualitatively change our fundamental conclusion. Notwithstanding the scale of the bloodbath the bourgeoisie has unleashed on the working class, the latter ’s inability to respond with generalized resistance is symptomatic of a class that continues to be politically and organizationally weak. In some important respects, including co-ordination of struggle, the current responses have not even matched some of the heights reached in the early years of the anti-globalisation movement and in the anti-war campaign. This on-going weakness is going to be a major factor in the ability of the capitalist class to overcome the current crisis and restore capitalism to a new bout of profit making.

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