The crisis of European capitalism – Part Two

See Part One


The prospect of a Syriza government caused a wave of panic in the bourgeoisie of Greece and internationally. They organized a massive campaign to drive people away from Syriza, warning of economic catastrophe if they came to power. That was sufficient to panic wide sections of the middle class, older people and backward layers into voting for the New Democracy.

However, the election result has solved nothing. The economic problems remain as they were before. There is a very fragile and temporary calm in the situation, which will not last long. The mood amongst the broad masses is just as sceptical and pessimistic as it was before the elections. Even among those who voted for the New Democracy few believe that Samaras will achieve anything. This is not a very solid base from which to launch a new series of attacks on the living standards of the Greek people!

After three years of continuous fights and upheavals there must also be an element of tiredness among the Greek masses. There may be a temporary lull. But new upheavals are inevitable in the next period. In reality, Tsipras was lucky he did not win the elections. A Syriza government would have been immediately put under enormous pressure from the bourgeoisie and the masses. But now Samaras will be responsible for solving a crisis that on a capitalist basis cannot be solved.

The electoral support for New Democracy will soon begin to erode. In opposition, Syriza will grow. This is already beginning to happen. There are many reports of people who are trying to find Syriza in their areas and beginning to organise themselves. These are especially the advanced militants but also include thousands of young people, especially the unemployed and students.

However, Syriza itself is still relatively small in terms of members. Many of its cadres are imbued with reformist ideas, some are ex-Stalinists and a fair number are old eurocommunist reformist sceptics. The problem is aggravated by an influx of sectarians whose only experience is of running around without doing any serious effort to organise the members. These are serious obstacles to building a genuine communist party. But the party will be built in any case, and the masses will know how to overcome these problems.

Inside Syriza there are different tendencies: on the right as well as the left. Tsipras himself stands on the left but his programme is confused. And in a situation like this, confusion is very dangerous. The Greek Marxists within Syriza have an important role to play in offering clear ideas and perspectives to the party as a whole.

In the last elections Syriza won 52% of young people of 18-24 years. That is a very important fact. This layer will play an important role in transforming the party. In 1917 the Mensheviks accused the Bolsheviks of being a “party of kids”, which was largely true. The membership of the Bolshevik Party was very young. The Mensheviks were mainly older trade unionists, inclined to reformism.

The main slogans of the Marxists must be: Get organized in Syriza! For a revolutionary Syriza! Build the revolutionary Marxist tendency of Syriza! On that basis a consistent Marxist policy can come to the fore. We are confident of the superiority of Marxist ideas and programme, and we are sure that over a period of time, on the basis of experience, these ideas will become the ideas of the party as a whole.

A crisis of the regime

Trotsky explained that it is sudden and abrupt changes in the situation that creates revolutionary consciousness in the masses. The crisis is shaking the masses out of their apathy everywhere. There is a growing ferment in society. A critical mood is developing and a questioning of the system, which was not the case before.

The present crisis is rapidly exposing before the eyes of the masses all the rottenness of the existing society and its institutions. One layer after another of the Establishment is being summoned before the judgement seat of public opinion and found guilty: bankers, politicians, prime ministers and presidents, press barons and bishops. Those who were respected and revered are despised or loathed.

The masses are looking for a way out of the crisis. This is reflected on the electoral plane in violent swings to the left and to the right. One after another, governments rise and fall. Every possible combination is tried and fails, because on a capitalist basis there is no way out of the impasse. Thus, over a period, politicians, parties, programmes and ideas are put to the test. The masses gradually learn what lies behind the hollow promises.

A mood of scepticism is beginning to develop, which places a question mark over parliamentarism and politics in general. However, in Europe illusions in parliamentarism are deeply rooted. The masses will not easily abandon the organizations that they identify with. But every one of these organizations will be put to the test. There will be a whole series of crises, ferment and splits, with the rise of new political formations, like Syriza, Die Linke and the Front de Gauche, out of the old. Marxists must follow such developments attentively and be prepared to intervene energetically to reach the most militant layers of the class and the youth.

The next period will see a sharp polarization to the left and to the right, as we already see in Greece and France. For reasons we have explained many times, there is no possibility of fascist or Bonapartist reaction in Europe in the immediate future. However, the rise of Golden Dawn is a warning of what to expect if the working class fails to take power in Greece. In the immediate future, the bourgeoisie is compelled to rule through the mechanisms of bourgeois democracy. In reality, they must lean for support on the tops of the trade unions and the Left parties.

However, as the crisis becomes deeper, the bourgeoisie will decide that there are too many strikes, too many demonstrations, too much chaos. Then the slogan of Order will be advanced. Plots and conspiracies will be hatched, like the Gladio Conspiracy in the 1970s. But long before the question of Bonapartist reaction could be posed, the working class will have had many opportunities to take power. A premature attempt at a coup, for example in Greece, would provoke ferocious resistance that could lead to a revolutionary upsurge.

It is true that the crisis is unfolding unevenly. That is always the case. It unfolds faster and with greater intensity in the weaker capitalist countries, like Greece, Ireland, Portugal, Spain and Italy, while Germany and Austria lag behind, and Britain is somewhere in between. But all countries will be dragged into the general crisis at one time or another.

Everywhere we see the heavy burden of the past, which weighs like an Alp on the consciousness of the masses and is particularly noticeable in the leadership of the mass organizations. The reformist leaders of the trade unions and the Left parties are living in the past. But even the minds of the shop stewards and union activists are clouded by the memories of past defeats. They are infected with moods of scepticism and cynicism.

That is even more the case in the active layers of the Left Parties, who were miseducated by Stalinism and reformism in the past and have no confidence in the working class. It will take great events to revive this layer, and many will simply drop out of politics altogether and be replaced by a new generation that is not burdened by the memories of the past.

In general, the weight of capitalist crisis falls most heavily on the shoulders of the youth. In Spain half the youth are unemployed. In Britain, Cameron wants to take away housing benefit from the under-25s, etc. From the ranks of the youth the best fighters will come. They will be attracted to the trade unions and the Left parties as a means of changing society. That is what we must base ourselves on. In the words of Lenin: He who has the youth has the future.

No way out

Some think that the sole aim of the ruling class is to save the banks. That is too simple. There are contradictions between different sections of the capitalist class, and the bankers represent only one section. In Britain the weight of finance capital is very great because of the destruction of British manufacturing industry. But even in Britain the Tory-LibDem coalition has been forced to put pressure on the banks, investigating the affairs of Barclays and RBS after the latest interest rate fixing scandal. Cameron demanded the resignation of the head of Barclays, while the timid Labour leader Miliband wants to see him in jail.

In Germany, it is the industrial wing of the bourgeoisie that rules the roost. They are putting pressure on the banks to pay up and accept losses. In Spain, the shares of Bankia lost between 80-90% of their value, even though the value of these shares was supposed to be “guaranteed” by the state, and the government was in the hands of the right-wing People’s Party.

On all sides we see insoluble contradictions. The demand is being raised for Eurobonds. But somebody will have to underwrite these hypothetical bonds. Who will that be? Why, Germany, of course! When the debtor nations propose the establishment of Eurobonds, Merkel answers: “not in my lifetime”.

The German Finance Minister says Greece has received more money than Germany got from the Marshall Plan after World War Two. This is a lie. After 1948, Germany received far more from the USA to pay off the vast debts she had accumulated before and during the War. Yes, but that was at a time when the USA held two thirds of the world’s gold in Fort Knox and the capitalist world economy was in a tremendous upswing.

What is the position now? The world economy is in the deepest crisis in history. The USA has a huge deficit – both externally and internally. The biggest creditor nation in the world has become one of the biggest debtors. And as for Germany, there is not enough money in the Bundesbank to bail out Spain and Italy. The debts of Italy alone amount to almost two trillion Euros.

Germany does not want to pay, but it cannot simply allow the Euro to collapse. On the one hand, German (and American) banks hold large amounts of Greek, Spanish and Italian debt. On the other, Germany exports its goods to the Eurozone.

To the insistent demands for Eurobonds, Merkel replies: Certainly, but we demand that all debts must be agreed by the EU (that is, by Germany) before being presented to the national parliaments. We further demand that the EU (that is, Germany) must have the right to interfere with your budgets and veto unacceptable spending, etc. That is to say: Germany will only agree to underwrite your debts when you agree to hand over your national sovereignty to us.

With an astonishing mixture of cynicism and insolence, Cameron says: We agree that there should be closer union of the Eurozone states to save the Euro [and protect British interests] but we British will not be part of it and will not pay a single penny to help you. However, what Cameron says or does is of little consequence to Europe nowadays.

It is highly unlikely that France, Italy and Spain would agree to sign away their independence to please Merkel and the Bundesbank. Even if Hollande, Rajoy and Monti were to agree to it, it would have to go before their national parliaments for ratification, and probably would have to be put to referendums, which would take years and lead to interminable arguments. However, the crisis of the Euro is taking place right now and the markets will not wait until the cumbersome workings of parliamentary democracy decide the issue.

Markets and investors are losing patience. There has been what can only be described as a “slow motion” run on the banks in Greece and Spain. That shows what the future holds. The European banks are poised on the edge of an abyss. Sooner or later a big bank will fail, as happened with the Kreditanstalt of Vienna, which collapsed in May 1931. Such an event can be the trigger of a general European banking crisis and a deep slump, which will have the most serious consequences for the whole world economy.

Utopianism of the reformists

The reformists have no solution for the crisis. They have accepted the capitalist system and all its workings. In their blindness they believe that the cuts are the product of ignorance or “ideological motivation”. Some have attempted to blame the rating agencies. This is like blaming a thermometer for registering a fever. If you break the thermometer, the fever will not go away. If you ban the rating agencies, the markets will continue to operate just as before. And under capitalism, how can one legislate to stop the bourgeois taking their money out of dangerous or unprofitable markets and transferring it to safer or more profitable ones?

Slogans like “tax the rich” can have a positive effect as agitation, but they lack any scientific content. Hollande proposes to raise the tax on high earners to 75%. This undoubtedly won him votes, but if he tries to put it into practice, it will lead immediately to a massive outflow of capital from France to Switzerland or even to Britain, where Cameron says he will welcome it with open arms (this did nothing to improve relations between Paris and London).

The problem with reformism (especially of the Left variety) is that, by interfering with the market, without eliminating it, it makes it impossible for capitalism to function normally. In the case of France, if Hollande attempts to put his programme into practice, he will be met with a massive strike of Capital that will force him to change course. That is what happened to Mitterrand in the past. But the situation is far worse now than in 1981 and Hollande’s volte face will be much faster and more abrupt. This will cause a new explosion of the class struggle, with a growth of the Front de Gauche and ferment in the ranks of the Socialist Party.

What is the problem? The working class has shown that it is willing to respond to a bold call to action when it is made. But the leaders have no confidence in the working class or in themselves. Even the best of the Lefts are reluctant to go all the way. They are always looking for some “clever” solution that will allow them to avoid a direct conflict with the ruling class. But without such a confrontation no way out is possible, and these “clever” slogans will only result in an even worse crisis.

Tsipras has become very popular through projecting a left image and opposing austerity. But his programme is completely utopian. He wants Greece to stay in the eurozone, while rejecting the terms dictated by Brussels and Berlin. The leaders of the KKE want Greece to return to the drachma. But the first option is rejected by the bourgeois leaders of the EU, while the second is a finished recipe for economic collapse. In reality, there is no solution for Greek capitalism either inside or outside the euro. To argue anything else is to deceive the working class.

The idea that the solution is to refuse to pay the debt while remaining within capitalism is typical of the utopian notions of the radical petty bourgeoisie. Unless this slogan is linked to the expropriation of the bankers and capitalists it would lead to economic collapse. This shows the limited nature of the programme of Tsipras, who seems to believe that Greece can avoid paying its debts to the German and French bankers and yet remain in the Eurozone. This is utopian in the extreme. Greece would soon find itself outside, not just the Eurozone but also outside the EU, cut off from international money markets and unable to borrow money to pay wages and pensions.

The only correct transitional slogan is for the nationalization of the banks without compensation. These parasites have already had too much public money. Not a single penny or cent for the bankers! Only by nationalising the banks and insurance companies will it be possible to move towards a rationally planned economy.

The expropriation of finance capital will provide many opportunities to solve the problems facing society. However, the nationalisation of the banks is, in itself, insufficient. Even if the entire banking system were nationalised it would not end the anarchy of capitalism. It is necessary to nationalise the big monopolies that dominate the economy, under democratic workers’ control and management. The “commanding heights” of the economy must be in the hands of the state, and the state is in the hands of the working class. Only then will it be possible to plan the productive forces in a rational and harmonious manner.

We must tell the truth to the working class of Greece: there is only has one option: to take power and then appeal to the workers of Europe to follow their example. Down with the Europe of the Bankers and Capitalists! For the Socialist United States of Europe! That is our slogan. If the Greek workers take power into their hands, it would have an electric effect on the workers of all Europe, beginning with Spain, Italy, Portugal and France. It would have at least as big an impact as the Russian Revolution in 1917. The whole situation would be transformed.

In countries like Greece, Spain, Portugal, Ireland and Italy, the budget deficit and the national debt are becoming key issues as the ruling class is forced to implement massive austerity cuts. We demand an immediate halt to any payments of interests on the national debt and for a repudiation of the debt altogether (as opposed to the reformist slogan of an audit). This would immediately raise the question of how these governments would fund their spending. We answer: through the expropriation without compensation of the whole of the banking and insurance sector and its centralisation into one national state bank to be used for the planning of the economy.

The nationalisation of the means of production, distribution and exchange would allow these forces, which are left idle by the anarchy of capitalism, to be used. In Spain the banks and cajas own thousands of empty properties. At the same time, there is a large and growing number of homeless people. We demand that the empty houses be handed over to the homeless.

There are millions of unemployed (11% across the EU) and plenty of social needs to be fulfilled. The immediate introduction of a 35-hour week without loss of pay would enable us to mobilise the millions of unemployed workers to build houses, schools, roads and hospitals to satisfy the needs of society.

However, there is nothing magical about transitional demands, which, as Trotsky says, are not enough:

“Of course the sliding scale and workers’ self-defence are not enough. These are only the first steps necessary to protect workers from starvation and from the fascists’ knives. These are urgent and necessary means of self-defence. But by themselves they will not resolve the problem. The main task is to pave the way to for a better economic system, for a more just, rational and decent use of the productive forces in the interests of all the people.

“This can’t be achieved by ordinary, ‘normal’, routine methods of the trade unions. You cannot disagree with this, for in the conditions of capitalist decline insulated unions turn out to be incapable of halting even the further deterioration of the workers’ conditions. More decisive and deep-going methods are necessary. The bourgeoisie, which owns the means of production and possesses state power, has brought the entire economy to a state of total and hopeless disarray. It is necessary to proclaim the bourgeoisie bankrupt and to transfer the economy into fresh and honest hands, that is, into the hands of the workers themselves.” (Discussion with a CIO organiser, 29 September 1938, our emphasis)

These words of Trotsky express the essence of transitional slogans, which is that they point the way to the socialist revolution as the only way out. The seriousness of the crisis is such that already in countries like Greece many people – not just the advanced workers and youth – are drawing revolutionary conclusions. We must hammer home to the advanced workers and youth the need for the working class to take power.

It is hardly necessary to explain to people who have lost everything that a fundamental change is necessary: not partial solutions or “clever” slogans but the complete overthrow of the present system is needed.

Are you a communist?
Then apply to join your party!