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Political crisis and pensions

2020-01-18 | Global News

This has been the week when the British government presented a strategic perspective in which it will wage wars on its own, when the war in Libya grew tense with the dispatch of 2,000 Syrian soldiers to Tripoli by Turkey, when the European Commission presented a trillion-euro plan to implement the "Green Deal" and when a truce was signed in the trade war between China and the US that does not bode well for any relaxation of inter-imperialist conflicts. But while these were the issues we focused on this week, from Chile to Russia to Germany and Turkey, other news emerged that illustrated both some very important aspects of the global situation and some hopeful outbreaks of mobilization that augured well for class responses.

Further reading in Spanish

The political apparatus in crisis


Dolores Delgado

We saw it this week in Spain, where the new Sánchez government is still trapped in the political expressions of the petty bourgeois revolt on the periphery (not just the Catalan petty bourgeoisie). In an attempt to reduce the judiciary tension against the politicians who organized the 2017 referendum, the government has elected as attorney general the former minister of justice, Dolores Delgado, thereby shattering any semblance of a "separation of powers". A formalism? Certainly, but formalisms are essential for the state and cannot be broken without upsetting judges and prosecutors.

What's more, as of yesterday, Sánchez made a pact with his main pro-independence ally, the ERC, to scale down the Guardia Civil in Catalonia and purge the top officials responsible for investigating the "procés". A purge of the repressive apparatus at that level, with objectives set by a peripheral party whose openly stated aim is to fracture the state, will not happen without seriously ruffling some feathers. The spokesmen and thinkers of the "deep state" have already gone as far as to denounce Sánchez's executive as a "government which compresses the other powers" and is prepared to govern by decree, a concentration of political power which they rightly point to as part of a global trend towards authoritarianism, but also as a danger to a state which very likely will try to defend itself against its own political apparatus.


Merkel during her New Year's Address

With less fanfare and drama, Germany is another example of a political apparatus in crisis. Merkel is reaching the end of her career without a successful succession and the SPD, the fundamental governing party in German politics, continues to decline in the polls. This week they gave her a new low record: only a 13% vote intention.

This follows a 2019 that offered only 0.6% of GDP growth. The German press spoke of "mini-growth" and "the end of the German model" in the face of the trade war and "structural changes" in the world market, while the international press highlighted the pressure on Merkel to spend the fiscal surplus on measures to revitalise the economy.

In reality, the German government has little choice for spending that surplus. There are no profitable destinations where capital can be applied. And that applies even to public investment. Germany currently holds 15 billion investment funds of public money with no destination. "There is no way investment has become so complicated" the finance minister stated recently, while asking regions, municipalities and private developers to "Please take the money!". That is why those who propose to increase spending are actually always aiming for the "Green Deal". Only a change in the productive structure of such dimensions, with the state ensuring a transfer of income from labor to capital, can generate sufficient applications of capital to temporarily put accumulation back on track. This is what the big speculative capitals and their "theoretical" expressions like Davos trust in, and this is what the European "Green New Deal" and its trillion euros aim to cover.

However, a commitment of such dimensions would be unthinkable without a political and ideological backing capable of presenting "a new time". That is why Germany is now celebrating, from the right wing to the left wing and over all media, the 40th anniversary of the Greens' as a national achievement, that is, of national capital. It is striking that a party that claimed to be trying to overcome capitalism, that defended that the bourgeois-proletarian contradiction no longer had a revolutionary synthesis and had been replaced by the capitalist-nature contradiction, is being promoted so frankly as a party of government by the German bourgeoisie. They are so bent on creating a "sacred climate union" by presenting it as a generalised social movement that they have even brought the Constitutional Court into it: Louise Neubauer, the German leader of "Fridays for Future" filed a lawsuit against the federal government urging it to speed up the "green deal". Normally it would not even be followed up by the media, but this time they hope that the judicial spectacle will serve to consecrate constitutionally the great gamble in the background and, at the same time, to prune the most catastrophic expressions, lest there be an "excess of enthusiasm" and the green deal end up in inflation, the antiquated bogeyman of German capital.


Demonstrations in Kemerovo

The surprise of the week was Putin's proposal for constitutional reform. The main point: the parliament would nominate the prime minister and the committee of presidents of the federated republics, which represents the local chieftains and powers, would become the "Council of State" incorporated into the constitution. This would close the door to a new game of alternation between president and prime minister, such as the one played by the Putin-Medvedev alliance.

We could summarize the whole thing in two points: basically, neutralizing the centrifuge potential of the local powers and immediately extending a golden bridge to Medvedev, who effectively resigned immediately with his entire government. Medvedev was not only discredited by the territorial factions of power in the state. Also, as prime minister, he served as a target for the rejection produced by the costs of the Putin-Medvedev strategy: with only 36% approval, Putin could consider his alliance definitively redeemed.

The key to this, however, goes beyond Medvedev's personal wear and tear or the attempt to contain the different power groups -territorial and institutional- in their centrifugal tendencies. Both are present, but even more so is a continuous and omnipresent social rage that threatens to explode into revolt, especially among the workers. A rejection to which the political system does not know how to give way even through the extra-parliamentary opposition supported by Russia's imperialist rivals. The constitutional change is the expression to the Russian one, of the crisis of the political apparatus.

The reconversion of Russian capital continues unabated. Since 2005, more than 35,000 large or medium-sized factories have been closed. To this should be added 38,000 cooperative farms closed down during the last twenty years. A new class of small farm owners -the social base of Putin's power- now produces 50% of livestock and 90% of agricultural output. The consequence has been a new surplus of labour and new internal migrations. Russia has lost more than 3,000 towns and 20,000 villages over the past 20 years. The costs to workers are immense. Almost 20 million workers live on wages below the subsistence threshold. Public services have been largely dismantled. In the last fifteen years, 4,300 libraries, 22,000 kindergartens and 14,000 schools have been closed. Of the 10,700 large hospitals in operation in 2000, only 4,400 remained in 2015, and of the 21,500 local hospitals only 16,500 remained in 2015. It is no coincidence if, immediately after the electoral farce, despite the massive consensus supposedly reached by the bourgeoisie around its main candidate, an accident, such as the recent fire in a shopping centre in Kemerovo, so easily threatens to turn into an uprising against Putin and his regime.

"What to expect from Russia after its elections", 18/3/2018

Further reading in Spanish

The centrality and globality of the attack on pensions

Pedro Sánchez and Pablo Iglesias

The central moment in the crisis of the Russian political apparatus and its growing inability to frame the discontent was, not in vain, the approval of the pension reform in September 2018. Pensions represent a central element of the bourgeoisie's response to a crisis of accumulation for which it has not yet found a way out. This is what we are seeing in France, but also in Spain, where the government cannot give respite for even a week before outlining a line of attack.

The only way in which the world bourgeoisie seems to find its way out, is through the direct appropriation of the workers' coverage and meager savings -pensions, health and education systems- and the increase of exploitation in absolute terms: more real hours of work for lower total wages paid. Capital forces the realisation of surplus value by using the state, which should cushion its contradictions, but instead encouraging them.

1st Emancipation Congress, 6/23/2019

Sebastián Piñera, President of Chile.

Also in a context such as the Chilean revolt, pensions are at the centre of the debate. The Chilean revolt has by no means lost its "popular" character, that is, it has not managed to free itself from the terrain of the nationalist petty bourgeoisie. What is more, the confluence between the logic of the petty bourgeoisie in revolt, a part of the state bourgeoisie and the left of the political apparatus begins to express itself with a discourse that states that the...

...common horizon is the restitution of rights and the constitution of a guarantor state. This time, it implies demands that, in quantitative terms, redistribute resources, as well as reforms that, by putting an end to discrimination, qualitatively build a different society.

That is, a state that grows and absorbs a greater percentage of the petty bourgeoisie that graduates from the university deep in debt.

These statements show well what the Chilean revolt can aspire to within the straitjacket of the petty bourgeoisie that leads it. That is precisely why pensions are its weakest link, the element that when broken could lead to a mobilization of the workers on their own terms and objectives.

And this week, Piñera explained his proposal for pension reform, which obviously does not touch the core of the system - individual capitalization organized through the AFPs (private pension funds) of the banks - and raises the minimum pension little or not at all. As described by the Sol Foundation:

In general terms, the proposal increases the initial offer of the Government by one point and contemplates an additional 6% contribution by the employer: 3% will go to the individual account of the contributor and the other 3% to a collective fund, which will be managed by a public and autonomous entity. With the percentage equal to that proposed by the opposition, now the only substantial difference is that the latter envisages that all the additional contribution be directed to a collective fund with a logic of distribution.

In mixed pension systems between capitalization -private funds- and pay-as-you-go -such as the Spanish or French system- more than 75% of the contribution goes to pay-as-you-go. This is the model of Sweden or Uruguay. Under Piñera's proposal, 19% of the contribution would go to PAYG. In other words, Piñera reaches the model that is drawn under the strategy of Sánchez... starting from the opposite side. Capitalization models are a disaster for workers who see their pensions drop or even disappear during crises. For the same reason they are the best for capital. Not only do banks gain mass and scale without risk, capital as a whole does not suffer the cycles through the state accounts.

Today the bourgeoisie is contemplating only two strategies. Where it can, it introduces capitalization (via the Austrian backpack) or it tries to keep capitalization as the main part of the system (Piñera). Where it cannot, as in France, it tries to have the pay-as-you-go system determine everyone's pension "by points", as is already the case in Germany, where it has only made the elderly poorer to the point of leaving 50% of retirees in danger of poverty.

The challenge to workers

Demonstration against pension's reform a week ago in Paris.

In France, the mobilisation against pensions is still going on. Despite the government and the trade unions trying to wear it down, it's not. The week began with the leader of the CFDT union calling the strike a "period of collective hysteria" and calling for an end to the "blockade that tires the French". But that's not where the union game ended. The government "temporarily" removed the pivot age and let the unions find alternative ways to "save" in the pension system -that is, to cut pensions. In response the unions gave themselves the longest possible time to conduct negotiations, leaving the strikes, which are already the longest in recent history, condemned to exhaustion.

But the truth is that the lure of the "pivot age" does not seem to have worked. 57% of the French support the struggles even if the withdrawal of the "pivot age" is finally confirmed. Moreover, the mobilizations already underway were joined by those of public hospital workers in their battle against the abandonment of basic and emergency services. To the despair of journalists, the government and the unions themselves, the trade union parades continue to carry thousands of workers without managing to exhaust them. It is clear that the workers have understood what macronite pension reform means and want to fight it. The point is that fighting under the union leadership is to lose days of work to end up handing over the mobilisations to impotence. Something that the railway workers of Châtillon have successfully understood and which is increasingly present in the striking workers' conversations.

Even more hopeful, but just as equally suppressed, for the time being, by the unions, are the growing movements towards strikes in basic sectors in Turkey. Hopeful not only because they represent the recovery of a hitherto depressed combativeness, but because Turkey's increasingly central role in inter-imperialist tensions on three continents puts Turkish workers in a position that can effectively stop the spread of war and slaughter.

If we are unable to assert our vital needs against an economically and politically weakened bourgeoisie, it is because the terrain on which the trade unions lead the struggles is always foreign. Clearing it and putting ourselves firmly on our own ground today means moving from discussing pension mechanisms to demanding pensions according to the needs of everyone as well as rejecting trade union representation and parades in order to start organising strike assemblies and coordinating them among themselves.