Re: [OPE-L] German recession

From: Michael Heinrich (m.heinrich@PROKLA.DE)
Date: Thu Feb 03 2005 - 19:48:42 EST

With the answer to your third question I was too quick and too short. I
didn't want to say, that there is nothing else than to wait until we get
rid of capitalism. I wanted to point out a real difficulty of analysis
or of determination, that on the one hand there are always alternatives
(in the German case: not to cut taxes, to accept a moderate increase in
state debt, not to cut unemployment support, to strengthen public
investment, all this would improve the interior demand and German
economy lacks not of exterior but on interior demand. Such keynesian
measures could have greater effect, if they would be implemented on an
EU scale and supported by lower interest rates of the European Central
Bank. Such a policy seems not an utopia (it is not even an
anticapitalist project) but it presupposes that the government would
accept conflicts with strong fractions of the capitalist class and the
red-green government is not willing to do this). On the other hand there
are fundamental limits to all such measures. This shall not say, that we
shouldn't think about alternatives, but we must take into account the
structural limits of these alternatives (another limit of the
alternatives especially in Germany: the weakness of anticapitalist
movements and the orientation of the trade unions to support the
red-green government as the "less evil").

About the PDS: I see no real alternatives from this side. They
accentuate, there should be a "more social policy", but the main
interest of the party is to become an accepted member of the scene of
political parties in Germany, especially that the SPD accepts the PDS as
  a "responsible" partner for possible coalitions. The state of Berlin
is ruled by a coalition of SPD and PDS and the PDS has shown, that it is
willing to accept nearly everything for staying in this coalition.

In January a new party  was founded (by former social democrats and by
some local leaders of some trade unions). The core of their program is
the "old" position of the SPD, to "tame" capitalism, to bring some
social security to the working class. There is some sympathy for this
party (last year, when the discussion begun, opinion polls showed that
between 6 and 18 per cent of the voters could imagine to vote for such a
party). But how successfull this party really will be (the 5 per cent
limit makes it difficult for any new party to enter parliament, because
the voters think about the risk of a "lost" vote and tend to the "less
evil") and how this party will develop is not predictable in this moment.

Paul Cockshott schrieb:
> ================
> Your second question is not quite clear for me. Do you mean alternatives
> from other political parties? The alternatives of the christ democrats
> and the liberal party go in the same direction, they just want "more"
> (cuts etc.). And this "more" is also in some respect the result of
> red-green policy: where shall be the difference, when red-green executes
> the conservative programm, the only chance of the conservatives is to be
> more radical conservative.
> =========================
> What I meant was whether on the left there were any alternatives
> being put forward in public debate - for instance by the PDS
> ===========================
> Your third question is difficult. On the one hand there are always
> "some" alternatives: for example there is no need to decrease taxes now
> and then to state, there is not enough money for financing social
> transfers. So, some things could be very different. On the other hand
> there is no way to a happy capitalism. I don't see a possible policy
> bringing full employment (or nearly full employment) and the absence of
> economic crisis. If we want to get rid of this, I see no other way as to
> get rid of capitalism.
> ==========================
> The problem with this ultimatist position is that it suffers from
> two weaknesses
> 1. It does not account for why unemployment is much lower in
>    the UK than Germany. This will be pointed out by those advocating
>    a Blairite response - eg the SPD government, the EU commission etc.
> 2. Even if one wants to get rid of capitalism - as we both do
>    one has to propose specific means by which this will take place
>    economically. One has to put forward economic measures that
>    a. Offer people a direct improvement in their economic condition
>    b. Have an inner logic that moves on to further socialist development
>    Just saying get rid of capitalism is not itself an alternative. You
>    have to say get rid of it and replace it with what?
>    What would be the immediate steps that have to be taken to start
>    the transition process and how do you make these appeal to the
>    broad mass of the population?
> Paul Cockshott schrieb:
>>There is something wrong with your web reference to your
>>article I can not down load it.
>>Does the article touch on the 3 questions that I originally asked?
>>-----Original Message-----
>>From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On Behalf Of Michael
>>Sent: 03 February 2005 12:50
>>Subject: Re: [OPE-L] German recession
>>Paul Cockshott schrieb:
>>>The BBC yesterday reported that unemployment in
>>>Germany had climbed to 12% the highest since the 30s.
>>>What do German list members think the cause of this is
>>>1. what will be the effects of Schroeder's policies on
>>>  the level of employment
>>>2. what alternatives are being advanced.
>>>3. what do they think should be advanced
>>At least to the first point some remarks.
>>In December 2004 there were about 4.5 million people unemployed
>>(according to the official statistics), now this number increased to 5
>>million. The half of this increase happened because of a change in
>>rules: some group of persons, already unemployed, now becoming part of
>>the statistics. The other half is because of (ordinary) seasonal
>>reasons. So, there is no dramatic change in this moment, but it is true
>>that unemployment in the last years is higher than ever. Also this 5
>>million is a number which is too less. The real number of unemployed
>>persons may be near 6 million or more.
>>The Schroeder policy (especially the "Hartz IV" laws) cut considerably
>>the unemployment support and increase the pressure on the unemployed to
>>take every job (even if it is paid much less as the usual wage rate, 30%
>>less are "to bear"). Also the "1-Euro jobs" shall be increased: persons,
>>who get support can be forced to work for 1 Euro per hour (an income,
>>which is added to the support) in "useful" areas. Until now this means:
>>cleaning parks, perhaps in the future: an unemployed teacher has to give
>>additional lessons for 1 Euro per hour.
>>The red green government has not only implemented the biggest social
>>cuts since the end of World War II, by forcing the unemployed to take
>>every job, they also produce a pressure on all wages. And at exactly the
>>same time as the cuts of Hartz IV began (Jan. 1st, 2005) a tax "reform"
>>started lowering considerably the tax rate for high incomes (the highest
>>rate falls from 45 to 42 per cent, the lowest rate from 16 to 15 per
>>cent - by the way: for non-germans also 42% may seem high, but with
>>German tax laws, you have very good chances to diminish your income,
>>which is really taxed with the official tax rates, so that the "real
>>tax" in Germany is not higher than in countries, which have (nominal)
>>lower tax rates).
>>Lowering the unemployment support will not produce new employment
>>possibilities, perhaps it will cut demand and destroy some employment.
>>Past measures of red-green, for example stimulating of so called
>>"Minijobs" (not full time jobs with less cost for social security)
>>brought a notable reduction of the number of jobs with full social
>>In sum, red-green policy is a desaster for the working class in general
>>and especially for the unemployed and persons with low income. Sure, the
>>explanation for this policy is complex, but one moment must be
>>mentioned. The party, which voters have the highest average income, is
>>the Green party. At least for this group of voters, red-green policy is
>>perfect. I don't want to say that this is the only reason for this
>>policy, but it is a fact, which may be not known outside Germany.
>>For those, who read German, an article on Agenda 2010 and Hartz IV, I
>>wrote last year, may be interesting. It can be found at my site
>>( see "Texte zu aktuellen Entwicklungen")

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