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ECONOMICS -
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Neoliberal Transformation and Class Struggle

Posted in the database on Tuesday, April 25th, 2006 @ 17:29:34 MST (2062 views)
by James Petras    axis of logic  

Untitled Document

Introduction

Marxism is about the concrete analysis of specific structures of capitalism as it evolves as a result of the class struggle and the inner dynamics of profit maximization.  The key premise for understanding the conversion from “welfare capitalism” to neo-liberalism is the success of the capitalist class in the class struggles which has led to the favorable structural changes, which in turn create favorable ‘objective conditions’ for outcomes favorable to the capitalist class.  The dialectical relationship between class struggle and structural transformations is decisive in the relationship between capital and labor.

If it is true that the class struggle is the “motor force of history”, class relationships shape the specific objective conditions within which that struggle takes place.  The shift in the relationship between capital and labor is shaped by and determines the level of the class struggle and the probable outcome – the advance in power and profits of the capitalist class or the power and social benefits for the working class.

To understand the current structural obstacles to the advance of the working class – and especially the weakness of the working class in the face of the capitalist offensive, it is important to first review, in a telegraphic manner, the process of class struggle which has led to the current situation.

Historic Patter of the Class Struggle: Italy

To analyze and explain the advance and retreat of the class struggle in Italy, it is important to periodize specific conjunctures.  The intensity of the class struggle cannot be precisely situated in time and place because of regional, geographical and socio-economic variations within Italy.  Advances in one region or sector are not always followed in another; major strikes occur in the midst of a general period of decline.  Uneven development of the class struggle by sector and regions is shaped in part by the uneven development of the economy and the historical, cultural experiences embedded in different sectors of the working or capitalist class.

Notwithstanding these methodological problems we can identify four key shifts in the intensity of the class struggle:

  1. 1944-49  - Class struggle is high, working class advances especially in early period immediately after the defeat of fascism.  Question of state power, with sectors of the working class armed and occupying factories and bourgeois in retreat and dependent on Anglo-US military, Vatican and “ex”? fascist sympathizers and mafia.  Reformist leaders in PCI and Socialist Party channel struggle into social reforms, favorable labor legislation and institutional channels.

  2. 1950-64 - Relative decline of class struggle, with onset of Cold War, capitalist consolidate  state power but are forced to accept social advances of the earlier period and the existence of a powerful trade union movement.  While challenge to state power is weakened, the organized working class continues to grow, wages and protective social legislation advances.  The working class does not suffer any decisive defeat, mobilizing in general strikes against the “roll back” strategy.

  3. 1965-75 – Powerful resurgence of class struggle – working class goes on the offensive with massive support of students, intellectuals and unionized public employees, pensioners and under-employed youth.  Extra-parliamentary left grows in strength and challenges reformist parties and trade unions.  Factory delegates and assemblies challenge capitalist class for hegemony in workplace and proletarian neighborhoods.  Rightwing and state repression provokes the emergence of armed urban insurgency.  Struggles result in increasing worker rights in factories, relative increase in wages, pensions, vacations, social insurance.  But reformist leaders retain control of trade unions and aid capitalist class to re-consolidate the capitalist state and property.

  4. 1976-2006 – Decline of extra-parliamentary struggle, as a result of state repression supported by reformist parties; capitalists re-group and begin to prepare a new offensive against the organized working class in factories; reformist parties and trade unions are generally “institutionalized” with a ‘captive minority’ unable to counter emerging offensive; struggles are already defensive and social gains of past are eroded.   Most significant is the restructuring in major economic sectors. Capital shifts to finance, relocates overseas, and converts to commerce (compradors) and services.  Neo-liberal model replaces “welfare capitalism”; the capital-labor pact is replaced by bourgeois-dominated electoral pact with a neo-liberal program.

  5. 2006 – The resurgence of class struggle in Europe – led by student-worker-unemployed alliance against “precarious work contracts.  The French example is a model for the extra-parliamentary left in Italy, Brazil and elsewhere.

General Observations

While the “theory of value” is operative in all phases of capitalism it cannot explain the variations in the class struggle or the rise and decline in the working class struggle (namely the outcome of the class struggle in concrete periods of time and locus).  Conditions of exploitation of labor vary according to the ebb and flow of the class struggle.  If ‘value theory’ is essential in understanding the nature of exploitation under capitalism it does not explain the variation in the degree of exploitation and the concrete socio-political context in which exploitation takes place.

The history of the class struggle reveals several salient characteristics:

  1. There is no linear progression or “cumulative advances”.  Periods of advances are followed by retreats.  However up to the 1976-2006 period, the retreat did not result in reverses of the previous advances and so the next phases of the class struggle built on and extended those advances.  The uneven progress of the working class means that the moments of socio-political crisis are decisive in determining whether the working class merely secures temporary social reforms (subject to reversal after the crisis) or prepares to challenge for state power.  Moments of advance should develop a strategy for power or face a period of retreat subsequently.  There are no “permanent mobilizations” or at least no continuous high levels of class conflict.

  2. There are no correlations between rising class struggle and the economic cycle.  In fact high levels of class struggle occur during capitalist collapse (1944-46) and in periods of rapid capitalist expansion (1965-75).  The political impact of the economic cycle – whether expanding or contracting – depends on the level of class organization and its insertion in the working class and among farmers, peasants and public employees.  The socio-political organization creates the ‘filter’ through which the working class interprets the economic cycle and reacts to it.

  3. There is no correlation between a “regime crisis” and the class struggle, because it is the permanent state apparatus (Central Bank, senior civil servants, judiciary and military) which decide the policy of the government.  There is a strong correlation between a crisis of the state and class struggle.  A failed state (fascist) in Italy, 1944-46, opened up a historical opportunity for the advance of the class struggle toward state power.

  4. The class struggle and movements develop unevenly because of political, social and historical factors.  Only a national political movement can integrate and synchronize the advanced and less developed sectors of the class movements.

  5. Eruption of high intensity class struggle results from the accumulation of forces, the creation of political cadre, and socio-political leaders with close links to the masses – in critical sectors of production, distribution and habitation.  The periods of intense struggle (1944-46) and (1965-75) were preceded by over a decade of careful construction of organization, recruitment of cadre and insertion in ‘everyday struggles for reforms’, infused with revolutionary consciousness.

  6. The period 1976-2006 has been generally characterized by a dis-accumulation or fragmentation, dispersion and loss of historic cadres.  Parallel to this general process, there has emerged new class conscious movements like the Reto Communisti (COBAS) which are ‘accumulating’ forces in the difficult circumstances of the disintegration of the ‘old centers’ (PCI, RC and CGT) of class mobilization.  The period 1976-2006 is a dual process of cumulative defeats and retreats, as well as the resurgence of new class-based movements struggling for socio-political hegemony.

The Struggle for Hegemony in the Working Class

Many leftwing cultural critics emphasize the role of the mass media in debilitating the class organizations and fomenting the de-politicizing of the masses.  While the constant pressure of the mass media does have some impact by itself, it explains little or nothing of the rise and decline of the class struggle.  For example, the majority of the mass media have always been opposed to class organizations and the class struggle.  Yet in the periods 1944-1950 and 1965-75 there were mass class confrontations and growing class movements despite the mass media.  The question is why does the mass media have greater impact today than in the past?  The reason is the difference in the class structure and the level of class organization, the loss of class perspective in the “alternative media” linked to the masses.  Above all, the decline of class conscious opinion leaders located in the factories, offices, neighborhoods who serve to interpret the news, events and policies and provide an orientation for the masses.  “Opinion leaders” can be “militants” or “cadres” or “activists” who link masses to class organizations and national or regional leaders.  Without class conscious “opinion leaders” strategically located in the class neighborhoods and workplaces, the mass media rules supreme. 

Hegemony involves “the battle of ideas”; ideas and experience determine social and political action.  To counter ruling class hegemony involves several inter-related levels of struggle: the day-to-day struggle in the market place (prices), workplace (salaries-security), living space (housing), institutions of education (public or private), health (public or private), pensions (age of retirement) and “the street”  (unemployment/temporary work).  The political problem is to transform individual or private discontent to collective, public action informed by a class analysis.

The second level is the struggle for programmatic and theoretical clarity: The struggle for a class perspective in the field of “culture” involves the battle for intellectual hegemony among the petit bourgeoisie (journalists, academics, students and professionals).  The question here is to demonstrate the conceptual superiority of Marxism as a class perspective in explaining and understanding objective reality and providing a basis for concrete action. 

The effectiveness of class theory, linked to practice, is to make it conceptually and linguistically comprehensible to the activists, militants and cadres who are the strategic links between masses and leaders.  Theory must be concrete and pro-active to be useful; abstract theory with an exotic language that is not understandable is worse than useless – it disorients the militants and dissociates the leaders from the cadres, and the cadres from the masses.

The ideological struggle on both levels is essential in constructing counter-hegemonic movements and creating working class consciousness.  The core of the cultural wars is deepening the class perspective against the individualism, self-indulgent pseudo-rebellious “youth culture”, a production of some sectors of the commercial media.  To counter the hegemonic forces from above (the mass media), the task is to create class power from below.

The Rise of the New Authoritarian

Accompanying the decline of the left, and in fact accelerating the process, is the gradual creation of a new authoritarian state below the surface of the parliamentary, electoral facade.  Beginning with the anti-‘terror’ laws and ‘strong state’ of the mid 1970s, the power of the ‘permanent institutions’ has greatly increased with little intellectual attention.  What are the features of the new authoritarian state?  The centralization of executive power, the increasing reliance on executive decrees, and the basic decisions by non-elected officials in the executive branch are signs of the emergence of the New Authoritarian State.
While political regimes of the “center-left” or the “right” rise and fall, the non-elected permanent institutions of the state attend to the design and implementation of macro-economic policy.  While electoral parties compete for parliament, the vertical institutions, that is, the state, Brussels, the international financial institutions, establish the real parameters for neo-liberal socio-economic policy.  The contradiction between the electoral parties professing “social welfare” and the centralized state dictating liberal capitalist policies is expressed in the total lack of correspondence between electoral campaign promises and the exercise of political power.  The elected officials, who govern, do so by subordinating the elected bodies (parliament) to the executive and the officials of the “permanent state”.  In summary while the New Authoritarian State rules, the elected officials legitimate the ruling centers of authoritarian power.

The Transformation of the Class Structure:  Foundations of the New Authoritarian State

The class structure has been transformed by the victories of the capitalist class, and the retreat of the traditional left parties and trade unions.  The defeats are a result of the failure by the trade unions and left parties to realize that the “social pact”, the “welfare state” and the ‘gradual’ or evolutionary changes were the result of a very particular historical conjuncture which created an equilibrium of class forces (the period between 1944-1974).  The left and trade unions during this period became embedded in the capitalist institutions and reliant on collective negotiations, ministerial compromises and the periodic pressures of the mass struggle.  Beginning in the late 1970’s this institutional strategy lost its potency as the capitalist class regained the initiative and moved aggressively to transform the economic institutions and social relations of production in their favor.

Large industrial factories concentrating militant workers were closed and production decentralized, dispersing the working class.  Temporary labor contracts and legislation undermined stable employment and increased the number of vulnerable precarious workers.  Capitalists greatly increased their power to hire and fire workers at lower costs.  Plants were relocated to non-unionized regions or out of the country.  These and many other measures had a cumulative dialectical effect.  A fragmented labor force weakened collective struggle and facilitated the further advance of capitalist counter-reforms promoted by the authoritarian state.  The occasional “general strike” or protest only served to temporarily slow the process in particular areas, such as extending the working age for retirement.  The liberal authoritarian state moved aggressively to privatize the economy, social services and cultural institutions.  These frontal attacks were directed toward reversing over 60 years of accumulated reforms achieved through class struggle.  The whole theory and practice of the social pact promoted by the trade unions and the traditional left proved useless in the face of the large-scale, long-term capitalist offensive against the rules of the game and the very existence of left trade unions and institutions.
The Contrast: 19th Century Liberalism and 21st Century Neo-liberalism
To understand the changes in class relations resulting from the neo-liberal offensive, it is useful to compare it with the impact of liberalism in the 19th Century.  This comparison, while occurring in totally different social-historical contexts, nevertheless provides us with insights into the potentialities of new protagonists in the class struggle. 

Nineteenth century liberalism was directed against feudal-patrimonial-clerical social relations and constraints on trade, lending and market forms of exploitation of labor.  In Italy, a late industrializing country, liberalism favored merchants (compradors), exporters and luxury producers within the capitalist class against manufacturers producing commodities for popular consumption in the local market.  Faced with the constraints of the local market because of the low levels of popular consumption, the liberals embraced the imperialist-colonial policies of the Italian state.  Equally important to opening markets, liberal politicians saw overseas colonies as a means to siphon off the discontent of peasants and agrarian workers displaced by the extension of market relations. 

Unlike nineteenth century liberalism, the neo-liberalism of the 20th and 21st centuries takes place in the context of a highly industrialized welfare state.  Neo-liberalism displaces factory workers and public employees, not peasants and farm workers.  The neo-liberal policy targets trade union and working class constraints on market exploitation, not the Church landholdings.  The liberals faced a decadent latifundista class; the neo-liberals face a welfare state in crisis.  Nineteenth century liberalism, especially its democratic-republican variant, was able in some instances to harness the working class against the ‘ancien regime’.  The contemporary neo-liberal power bloc relies on the support of private commercial classes, post-industrial financial-real estate and regional interests, the authoritarian state, the mass media and “pre-capitalist” formations (the Vatican, Mafia, neo-latifundistas).  Neo-liberalism is a hybrid model which combines the retrograde feature of past social formations and the dynamic enclaves in elite financial and service sectors under the protective umbrella of the new authoritarian state (Mussolinismo without Mussolini).  Social democracy’s efforts are directed, in its old or new forms, to entice the “liberal bourgeoisie” to break with the “pre-capitalist” formations and the authoritarian state and to create a “center-left” alliance to “modernize” the neo-liberal state.  The concrete proposal on the neo-liberal project is the same from both the center-left and the right.  The reasoning of the neo-liberal power bloc is immaculate since they no longer fear a threat to property ownership from the revolutionary left; they see no reason to make social concessions to the reformists and the institutionalized trade unions.

Given the complex legal-administrative and regulatory regime engineered by the previous welfare state and the institutional constraints imposed by trade unions and center-left parties, the liberals favor an authoritarian executive backed by Brussels to impose the neo-liberal “reforms” and eliminate the remnants of the welfare state.
Neo-liberalism demands a strong state against the demands of the class organizations in civil society and a limited state in regulating the concentration of economic power.  The neo-liberal state does not expand the domestic market, it re-orients production to the European Union and the international market.  Workers are not seen as potential consumers but as costs in the export market.  Neo-liberalism does not displace peasants to expand capital investments; it displaces public employees via privatizations, converting public to private monopolies.  It does not convert artisans into factory workers; instead it converts factory workers into precarious, low-paid service workers.  It does not promote free professionals; it converts office workers to factory-like machine operatives.  It does not create a reserve army of unemployed; it produces a permanent army of unemployed.

With the rise of liberal capitalism the main contradiction was between the industrial bourgeois and the factory workers.  Under neo-liberalism, there are many contradictions between a concentrated “monopoly” capitalism and diverse sectors of a re-constituted working class.  Public employees operating office machinery (computers) share the same exploitative conditions as factory workers.  Young precarious factory workers share the same insecurities as unemployed workers.  Unemployed workers share the same ‘exclusion’ as immigrant workers.  Under liberalism, women were confined to the exploitation of the household.  Today they are exploited in a dual capacity – as workers at reduced pay and as housewives with family responsibilities.
Today there is greater dispersion of the working class, but many more sectors incorporated in the working class.  The subjective conditions (class consciousness) for class struggle have weakened but the quantitative and qualitative objective conditions have strengthened.
The transformations or attempted ‘counter-reforms’ of the neo-liberal elites clash with the cumulative social benefits of the working class, and create objective conditions for a new wave of class struggles.  The challenge is to unify the sectoral struggles of the unemployed workers, the underpaid women workers, the precarious workers, the pensioners, the immigrants, the traditional factory workers and the new machine operatives in the public sector into a new working class power against the new authoritarian state and its national and international rulers.

© Copyright 2006 by AxisofLogic.com



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