[OPE] Karl Heinz Roth, "Global crisis - Global proletarianization - Counter perspectives"

From: Gerald Levy <jerry_levy@verizon.net>
Date: Mon Mar 09 2009 - 08:51:43 EDT

Karl Heinz Roth
Global crisis - Global proletarianisation - Counter-perspectives
(a summary of initial findings - 21/12/08)
We are entering a world historical situation where all track switches of
social-economic and political life are newly aligned. It will be the second
epochal change for my generation after the period of 1967-1973. All the main
facts and indicators of the last weeks point to the start of a world
economic crisis which already now exceeds the extent of the 1973 crisis and
of the intervening crises of 1982 and 1987. The current crisis is
approaching the dimensions of the worldwide crisis and subsequent depression
of 1929-1938.
How should we react to such a gigantic challenge? This has become the
decisive question; this is why I have just completely rewritten a tract
which is currently in the works and which was intended as a reply to the
criticism of my hypotheses about the 'condition of the world', published in
2005. I am presenting the thoughts and research results that I have worked
out so far in the unfinished state of a synopsis because they will have to
be checked, corrected and expanded in a continuous dialogue before the
publication of the book;[1] the first outcomes of the discussion at an event
on the 27th November at the Schorndorf Manufaktur have already been
included, as well as results from a Wildcat collective internet debate,
those from a seminar of the Interventionistische Linke on the 13th of
December and those from dialogues with individual friends. In this way many
weak points, unclear issues and shortcomings were overcome, but due to lack
of time I will be able to deal with some important objections only in the
book manuscript, and I hope for your understanding. I hope my theses will
still suffice to make clear the basis of the analytic approach and of my
conceptual proposals. Thanks to everyone who joined the debate, not only for
helping me through criticism but also for greatly encouraging me; I have not
experienced such a wide and constructive dialogue, in such solidarity, for
1. The new world economic crisis
1.1 Development so far
The first world economic crisis of the 21st century started during 2006 as a
structural crisis and one of over-capacity in the car industry and as a real
estate crisis in the US, Great Britain, Ireland, and Spain. It was the end
to an incomparable 6-year global boom which had led to a further expansion
of the capital relation, with all its classical and also some new
speculative side effects; a development which had hardly been thought of as
possible anymore. The inflated prices of houses, flats and business
properties rapidly fell and this fall in value increasingly compromised the
mortgages and mortgage derivatives secured on these properties.
Additionally, the three US and some European and Japanese car companies
experienced distinct sales slumps: this signalled the start of a worldwide
crisis for the most capital-intensive sector of industrial production.
The crisis started to encroach on the financial sector at the turn of 2006
to 2007. The fall in private and commercial property prices expanded into a
worldwide mortgage crisis. Local mortgage banks went into the red through
massive writedowns and in June 2007 the American investment bank Bear
Stearns had to liquidate two of its hedge funds, in the first incident of
this kind. Because these suffering American mortgage credits had largely
been packed into non-transparent credit derivatives (Collateralized Debt
Obligations = CDO) which were sold on into the whole world, the drop in
their price and the connected massive increase in risk premiums led to a
global chain reaction which overlapped with the mortgage crises in Great
Britain, Ireland and Spain. The subprime crisis reached its first peak in
the summer of 2007. Its global character immediately became immediately
clear when the first action in support of banks threatened with collapse was
taken at the periphery of events, while all the banks' troubles originated
in the Anglo-Saxon crisis centres, as in the case of the illiquidity of
D�sseldorf Internationale Kreditbank (IKB) or S�chsische Landesbank
(SachsenLB), but also in that of the massive writedowns and trading losses
of the Swiss 'universal bank' [i.e. a single institution incorporating both
investment and retail banking businesses] UBS.
In five to six shock-waves since summer 2007, the mortgage crisis has become
a world-wide financial crisis. It had encroached on the entire banking
system by September 2008. The US investment bank Bear Stearns and the
British mortgage lender Northern Rock collapsed in March 2008. Subsequently,
after the initial German rescue missions of the previous year, the UK and
the US also undertook state intervention on a massive scale for the first
time: Northern Rock received a comprehensive guarantee of state support,
while Bear Stearns was taken over by the 'universal bank' JP Morgan Chase,
and the Federal Reserve Bank (Fed), the US central bank, organised the
break-up and refinancing of troubled securities.
A further shock followed in September: at the beginning of the month the two
largest US mortgage institutions, Fannie Mae and Freddie Mac, were saved
from collapse and recapitalised by means of extensive state support. This
was followed by the failure of the investment bank Lehman Brothers in the
middle of the month, while the investment bank Merrill Lynch was saved in an
emergency sale to the 'universal bank' Bank of America. But over the next
few months it was not only investment banks that suffered lethal blows and
disappeared from the scene by transforming themselves into or merging with
commercial banks. Leading insurance firms were also threatened, as was made
clear by the effective ruin of the largest US insurance company, American
International Group (AIG), one week later. It was mostly specific credit
derivatives (Credit Default Swaps = CDS) that had started defaulting. CDS
are used by buyers of bonds worldwide to insure themselves in off-market
bilateral contracts against the issuers' risk of default. As there is no
central counterparty and the CDS contracts are not subject to traditional
reinsurance regulation, they are associated with high risk. CDS worth at
least US$60 trillion have so far been distributed worldwide and could lead
to a fatal chain reaction if one of their main pillars, such as AIG, should
fail. In fact, AIG was supported by a series of government rescue packages,
adding up to $153 billion so far. But irrespective of this, in September
2008 the effect of the mortgage crisis on a key element of the global
derivatives market, whose volume is estimated to amount to at least $600 and
at most 1000 trillion, showed that the financial sector - the decisive
driving force of the previous cycle of expansion - was heading for the
abyss. The entire international financial system was shaking in September
2008, with commercial banks and investment funds which had come into being
in the 70s (hedge funds, private equity funds and pension funds) affected to
the same extent.
But the shock waves still continue unabated, as is evident in the massive
writedowns and operating losses of practically all globally acting banks.
Government guarantees for increasingly outsourced toxic assets, public
injections of capital to refill equity as well as an increasing number of
state shareholdings in financial sector capital are rescue measures which
have been launched in practically all metropolitan countries and which will
most likely continue to be part of government agendas. Since summer 2007
governments have been trying to keep the money and capital markets going by
means of coordinated interest rate cuts by central banks, along with supply
of liquidity to the collapsed interbank markets and the absorption of
troubled securities and debt instruments into the regulated public sphere.
As the most recent data show, it has not yet been possible to halt the
worldwide drying up of credit and the flight of asset owners from financial
funds to the 'safe havens' of 'hard' currencies and state bonds. The reason
for this is simple: the losses on mortgage paper and credit derivatives are
followed by increasingly foul credit card, leasing, and department store
credit debts, whose extent is as yet largely unknown but which has already
led to the de facto breakdown of Citigroup, once the largest US commercial
bank. An end to the global financial and credit crisis is not in sight, and
this occurs in a situation where it worsens the structural and industrial
sector crisis which started parallel to it, spreading like slow fire to
affect all parts of the world economic system.
Following the spread of tighter credit conditions and moves towards capital
flight, the events of the 'black' quarter of September-November 2008 also
reached the financial markets all over the world, i.e. those sectors of
capital reproduction where long-term capital credits are traded as company
shares, bond issues and equity derivatives (options and futures). The fall
in securities initially dragged with it the market prices of structurally
weak companies, especially in the car industry, before spreading
structurally and geographically to all stock market-listed capital. Since
the beginning of the year [2008], US, European and Japanese stock market
indices have fallen by 35 to 40 percent on average; the turbulence of
September and October increasingly evoked memories of the last century's
world economic crises. During the autumn months the stock markets of the
emerging nations began to feel the full effect, and capital losses there
have increased so rapidly as not only to do away with any speculative
overvaluations but also to initiate a phase of a massive destruction of
financial assets. The stock markets in the so-called BRIC states (Brazil,
Russia, India and China) are reporting year-on-year falls of between 60 and
70 percent.
A third decisive factor in the descent into the world economic crisis was
the worldwide collapse in primary commodity prices, which began in July 2008
after another huge increase in food and energy prices and almost classically
marked the turn from speculative bubble to crisis-type crash. By now the
price of crude oil has fallen from its highest price of $147 a barrel to
below $40, while prices of industrial metals and raw materials used in the
agricultural industry (cotton etc) have halved, and the prices for basic
foods (rice, corn, grain) have come down by about a third. Precious metals
still manage to hold their ground on the commodity futures markets, but even
the price of gold has been showing a tendential decline.
With these developments in mind, it comes as no surprise that transport
costs have also fallen drastically, as in many cases they are an important
element of primary commodity prices. Most notably, maritime transport, as
the main carrier of the global transport chain, has suffered deflationary
tendencies, with prices falling far below costs in some sectors and even
exceeding the extent and speed of decline seen in comparable data of last
century's world economic crisis. Rotterdam-Taiwan Lines cargo rates have
dropped from $2,500 per container at the beginning of the year to $400 by
October, and by November charter rates for the largest ship types for bulk
cargoes had declined to an 11th of their highest price during the boom in
2007. This not only causes commodity prices to fall further, but also has
significant further consequences. Up until this summer, the maritime port
and logistics chain had been geared towards a massive expansion of capacity
and infrastructure; now it is shaken to its core, and during the last weeks
at least 80% of ship-building contracts of the leading shipyards in China,
South Korea, Japan and Vietnam have been cancelled.
In a parallel development, the structural and overcapacity crises of the
automotive, building, and real estate sectors have deepened. Two of the US
car industry's 'big three' - General Motors and Chrysler - are about to go
bankrupt. But in the week before Christmas, by granting them emergency
credit, the Bush administration gave them a reprieve until March 2009; at
the same time the historical attainments of the US car industry workers are
now being wiped out. But the sector's crisis has by now reached all
companies in the car industry. Even for 'model' companies whose production
is highly labour-intensive and technologically innovative, with low-emission
products, worldwide turnover has fallen by about 20 to 30 percent. In most
cases, temporary and contract workers etc have already disappeared from the
factories, while regular staff have been sent on extended Christmas breaks
with a view to a longer period of short time working to come. Such temporary
solutions are not apparent on the lower levels of the car industry and news
is piling up of sudden factory closures amongst the small and mid-sized
All these tendencies are in a mutually intensifying and universalising
relation to the worldwide increase in credit costs. Since the third quarter
of 2008 the 'triad' regions of North America, Europe and Japan are in
recession. Mass unemployment has risen dramatically in the USA, the UK and
Spain and is by now extending its reach from the transatlantic region to all
developed national economies. Its economic counterparts are drastically
falling interest and profit rates which, together with the increasing cost
of credit and the rapid decline in orders, have led to a drastic drop in
investment projects. This on the other hand leads to a brisk contraction in
exports and the most export-intensive countries of the triad - Japan,
Germany and Switzerland - react to the loss of their export business with a
disproportionate reduction of imports, thus initiating a self-exacerbating
spiral of world economic decline.
Because of these massive import restrictions, the triad's crisis, which by
this stage was fully developed, encroached onto the newly emerging and
developing economies with full force from October 2008. They are hit by this
development at a time when their economic development depends primarily on
exports to the triad regions, with the associated economic imbalances
compensated for (up to this point) by accumulation of large foreign exchange
reserves. Now this unstable state of affairs ended abruptly. Tightening
credit throughout the world economy, collapsing share prices and declining
primary commodity prices, together with the losses of the export sector,
added up to an explosive mix, which was balanced temporarily by a recourse
to currency reserves and an increase in national debt.
But the BRIC states are not the USA, and even less so are the newly emerging
'economies' of the second series, such as Mexico, South Korea, Indonesia,
Hungary or Ukraine. The USA with its still-unchallenged world currency of
reference can afford a gigantic balance of payment deficits and debt
mountains without being called to account by its creditors. International
investors took their capital away as soon as the emerging nations' currency
reserves dwindled, their balance of payments worsened and budget deficits
increased. Huge currency devaluations have followed, provoking explosive
turbulence on the international currency markets. Additionally, and mainly
in the South East Asian, South American and Central/Eastern European
economies, the structural deficits and manifold constellations of
over-indebtedness are becoming visible. Since late autumn they have led to
the first de facto national bankruptcies, affecting Hungary, Pakistan,
Latvia and Ukraine, as well as the North Atlantic island republic of
Iceland. In those countries the social consequences are dramatically
intensifying, but also in the US entire city neighbourhoods are being 'shut
down' by the forced eviction of families from their owned houses and rented
flats. In California, a recapitalization programme to avert impending
insolvency has just failed.
>From a global viewpoint, a dramatic crash of gross domestic product has so
far been averted by means of massive political provision of financial
support by the countries and power blocs of the capitalist centre (to the
tune of an estimated minimum of $7 trilllion) and the widespread
introduction of anti-cyclical programmes (China, EU, USA and Japan).
Currency turbulence has also been fairly well controlled, with the dollar
remaining surprisingly stable up to now (although this could change very
quickly). This is the precondition for the continued functioning of the
strategic debtor-creditor-axis of the world system, China and the US.
Nevertheless the crisis has already exceeded the scale of the 1973 crisis
and will introduce a new cycle of exploitation and a new era in the
capitalist world system, even if it is successfully contained within the
next few months. But stabilization in the short term is rather unlikely. The
first phase of politically-driven financial bail-out measures was attached
to monetarist thought and has failed, as it tied much too closely to the
conclusions of Milton Friedman, the mastermind of the economic
counterrevolution: he had blamed the spread of the world economic crisis of
1929 almost exclusively on the Fed's mistaken monetary policies. The
escalating credit and investment strike by asset owners and the company,
bank and fund managers under their control cannot be stopped by a policy of
cheap money and the flooding of credit and capital markets with
interest-free liquidity. It is just as uncertain whether the economic
stimulus plans, which are Keynesian in parts, will have an effect: they have
not been globally adjusted and would need to be pushed speedily and on a
grand scale most of all by the strongest creditor and exporting countries
(Japan, China, euro-zone states). Investors are also not impressed by the
public budget's more or less complete incorporation of 'toxic' credit and
private debts, as long as this means the now obvious failures and strategic
mistakes of funds and bank managers are not followed up but pushed under the
carpet. Moreover, this only delays the mechanism of crisis but does not stop
it. For asset owners have long perceived of the Fed as a huge hedge fund
which is supplied with means by the US Treasury, acting as gigantic
investment broker. Thus it is only a question of time until they rate 'Uncle
Sam' as no longer credit-worthy. But where can they invest then? Right now
there is no new strategic economic sector in sight and the hope that the
newly emerging economies could put an end to the trouble in the tow of their
precursor, the strategic US creditor China, has long since evaporated.
1.2 Essential attributes of the crisis
We have put a lot of effort into showing how the various crisis factors in
the newest cycle of the crisis are slowly becoming synchronised. But what
were the main causes for the slow fire which started two years ago on some
of the roofs of the world economic building complex, and which has now
reached all sectors and territories of the global economic circuit? A brief
glance at the conjunctions within this process shows that they can be traced
back to three main characteristics. First, it is a crisis of a worldwide
over-accumulation of capital in all its appearances and metamorphoses:
productive industries are over-accumulated by an average of 25% (much more
in the car industry), the global transport chains by 30-35%, and the banking
and financial sector by at least 50%. Secondly, this over-accumulation goes
hand in hand with a massive global under-consumption, due to capital's huge
reduction of mass incomes in the centres in the course of the last cycle,
its above average growth rates on the basis of the lowest wages in the
emerging markets and its policy of leaving mass poverty in the South (slum
cities, shadow economy) in a state of imminent genocide by hunger. Although
the lower classes of those developed regions where the crisis started had
managed to compensate for their income losses by means of diverse techniques
of indebting themselves, their lowest segments were excluded from this on a
constant basis. Compared with the large increase in the productive force of
social labour, the difference between the development of productive forces
and income continued to grow wider to the huge disadvantage of the class of
workers, even in the US, Great Britain and Spain. Thirdly, a finance policy
of cheap money and cheap credit nonetheless compensated for the interplay of
over-capacity and under-consumption in the developed centres of the world,
but this could only delay the outbreak of crisis by a few years. As the
low-pay sector expanded and the precarisation of employment conditions
increasingly reached the middle classes, several million people worldwide
indebted themselves to the tune of at least $12 trillion (mortgage debt
without own means, credit card debt, hire purchase and leasing debt, student
loans etc). This mechanism worked for such a long time because the credit
debt pumped from the lower classes was diversified worldwide. But it reached
its outer limit in the course of 2006 and dragged the entire financial
system all the more abruptly into the abyss. Thus the mechanism enforced the
already existing structural distortions and over-capacity in the key
economic sectors (the construction and car industries and their supplier
sectors, but also information technology and the steel industry), and,
together with falling primary commodity prices, in the circulation sector,
and on the stock markets, as well as with the escalating credit
restrictions, it caused the new world economic crisis. A worldwide
investment strike by asset owners was the consequence, which by now has
affected all the main capital spheres because their interest and profit
rates have dropped one after the other in the course of only few months.
2. The previous cycle (1973-2006)
For a clearer idea of the inner dynamics, development perspectives and
likely consequences of the current world economic crisis we need to look
back briefly at the main characteristics of the previous global cycle
spanning the years of 1973-2006. Initially we will have to limit ourselves
to working out the main characteristics of the economic cycle of 1973-2006.
2.1 Characteristics of a typical long wave (Kondratieff)
The cycle started in 1973 with the world economic crisis, which led to a
depression that lasted several years. This crisis had been caused by
workers' and social revolts worldwide between the years of 1967 and 1973,
along with a world currency crisis (decoupling of the dollar from gold,
transition to flexible exchange rates) and the 1973 oil shock (Yom Kippur
war). During the following years, it turned into so-called stagflation, due
to the prevalent use of inflationary policies against the wage rigidity of
the working classes. Over the next 35 years, several five year-long boom
cycles followed one after another, interrupted by partial crises of which
some were serious: 1982 (second oil crisis), 1987 (USA), 1992/93 (Japan
crisis), 1997-98 (East Asia- and Russia crisis), and 2000/2001 (collapse of
the 'New Economy'). There was a decisive break between 1989 and1991 with the
implosion of the Soviet empire and the start of the rise of China. Without
the sudden and powerful expansionary push resulting from these events, the
last 'long wave' would have ended much earlier. Additionally, the credit
expansion concentrated mostly in the last boom period of 2001-2006 was
superimposed on the interplay of over-accumulation and shrunken mass income,
delaying the onset of the crisis by several years.
2.2 From crisis attack to over-exploitation of the global class of workers
Attack by capital in the form of 'crisis' forced the working class worldwide
into retreat until the end of the '70s. Despite fierce class struggles
continuing during the '80s, the working class was subjected to pronounced
processes of (re-)proletarianisation in the peripheries, in the newly
emerging economies and in the developed centres. I will go into more detail
on this later on in the text. Of interest here are the economic
consequences: mass incomes dropped in relative and absolute terms in
relation to capital and capital accumulation, and this process was kept
going by a systematic strategy of under-employment until the end of the
cycle. Capital's centres of activity managed to reap large profits and high
interest during the cyclical booms, despite all temporary and regional
slumps and despite some fierce struggles in which a new industrial working
class in some newly emerging economies (particularly in South Korea and some
South American countries) constituted itself. The suppression and
disproportionate exploitation of the class of workers and the pauperisation
of some of its most important segments, pushing them into 'working poverty',
was a major feature of the previous long wave, despite all counteracting
tendencies. But this feature was also the cause of this wave's collapse - a
collapse which was only delayed by the credit boom of the 'crazy' first
decade of the millennium.
2.3 New technologies
The reinforcement of capital's technological command was a further decisive
endogenous factor. The 'Kondratieff wave' of the1973-2006 cycle helped
capital increase its rate of profit through massive technical innovations by
lowering the organic composition of capital in strategic areas (with a
continuous drop in relative pay rates): transformation and standardisation
of the transport chain by means of the container, change of communication
structures by means of computer science and information technology,
micro-miniaturisation and robotisation of production facilities, and
conversion of machinery into assemblages of individually enumerated and
monitored components. There are no reliable data yet about the rise in the
rate of exploitation achieved during the previous cycle by means of the
further compression of labour processes, the introduction of new
technological instruments of real subsumption, the commissioning and
utilising of the subjective creativity of the exploited, or the totalisation
of managerial command through the organisation of work ('total productive
management' etc). But we can be certain that the total productivity of the
'social worker' has at least doubled over the previous cycle with annual
growth rates of between 2.5 and 3 per cent, with no corresponding gain for
the workers concerned.
2.4 Renewed expansion of the world market and the worldwide division of
As indicated above, the expansion of capital asset spheres and markets was
another important exogenous factor: it reached its peak at the beginning of
the 90s. During those years, a scrap dealer's son from Calcutta was able to
build up a steel empire from the investment ruins of Eastern Europe and the
special economic zones of the periphery; this is only one of many examples.
The decisive factor was the conjunction between this geographical process of
expansion with new forms of an international division of labour: new forms
made possible by a miniaturisation of fixed capital, by the new information
technology and by the massive lowering of transport costs. It became
possible to establish global network companies whose chains of value
creation are managed by development, design and marketing centres located
mainly in the metropolis: segmented labour processes can be distributed over
those world regions with the lowest rates of exploitation and then be
connected to each other.
2.5 The new world economic axis: Washington - Beijing
The fact that the new forms of international division of labour were indeed
the decisive strategic axis of the previous cycle becomes immediately clear
if we look at the two most important national economies, which entered a
silent symbiosis with far-reaching consequences at the beginning of the
1990s: the USA and China. This symbiosis consisted and consists of the
following: one partner saves and works hard, whilst the other spends the
resulting products and revenues wildly. Of course this is a very blurred
image, but it does reflect the decisive facts. In the process of China's
catching up with capitalist development, its state despotism chained the
peasant-workers and migrant workers to the world's extended work bench,
exported their products into the developed centres (especially the USA) at
dumping prices, and was contented with payment promises (government bonds);
this in turn made it possible for the USA to conceal the pauperization
processes resulting from its own low-wage strategy through credit expansion,
which itself was re-routed back out into the world. In this way, the
extended work bench has advanced to the point that it also becomes the
principal bank of the US, and it is chained to it for better or for worse,
as a sharp fall of the dollar would ruin both partners at once. This is
because the Chinese central bank has been holding the largest part of its
currency reserves in US dollars ($2 trillion) for some time and it has taken
up Treasury bonds amounting to almost $1 trillion: if there was an
uncontrolled slump in the US dollar, China's creditor position would be
dramatically weakened, while the US would go into national bankruptcy
because of the resulting flight of international capital. Even short of such
a horror scenario, a perverse debtor-creditor relation of this kind on such
an enormous scale seems an intractable problem. Yet a solution of some kind
has become unavoidable. A simple calculation shows how hard it will be to
balance out the decline in relative US over-consumption, which is already
under way and goes hand in hand with a reversion of the population to its
earlier common savings ratio of 5 percent of GDP, through a comparable
increase in Chinese mass consumption which would overcome the two-way
distortion in the balance of payments: in order for this to work, Chinese
mass consumption, which is currently very low, would have to be promptly
raised by 40%. This seems almost impossible but it highlights the fact, that
the lever for a world-wide anti-cyclical (and system-reinforcing) resolution
of the crisis lies with China in the first place, and that further
development of the crisis and the debt-depression likely to ensue will be
decided primarily by the ongoing development of the 'Chimerica'-project,
should no revolutionary transformation alternative intervene.
2.6 Worldwide expansion of financial and credit markets
The restructuring and internationalization of the chains of exploitation and
value creation would not have been possible without the international
expansion of the financial system. The flexibilization of the foreign
exchange rates led to the establishing of transnational currency markets
(eurodollar market, petrodollar market, asiadollar market) with continuing
supremacy of the dollar. Starting from these, new money and credit
instruments were developed to hedge against risks associated with foreign
exchange rates, constantly fluctuating commodity prices and stock market
volatility. The 'moderate' credit relation which had existed thus far
between banks and industrial concerns had relied on mid-term profitability;
it was now increasingly replaced by the autocracy of a growing layer of
capital asset owners set on maximum short-term maximum gains. They launched
a new sphere of investment funds to put the short leash of maximum equity
and debt yields on management of all economic and trade sectors. This led to
the "financialization" of the entire economic system and of all stages of
capital metamorphosis, increasing average capital yields to ratios of
between 20 to 25%, but with a corresponding increase in risk and
instability. At the same time, the expanding financial sector pushed credit
into the lower and middle classes, who had to accept it as it made it
possible maintain living standards to some degree despite the increasing
precarization of labour and income conditions. Additionally, a new dimension
of capital expansion into the inner workings of social reproduction began to
develop, led by the new financial sector. I would like to call this 'fee
capitalism': publicly owned, largely communal resources were expropriated in
order to transform everyday human reproduction needs (from drinking water to
energy supply to health care and protection against all other risks
associated with living) into commodities and to generate capital gains.
2.7 Increasing destruction of the material basis of the production and
reproduction of capitalist society
A last important exogenous factor of the previous cycle was the increasing
destruction of the economic system's natural basis. This was not only a
consequence of the immense qualitative and quantitative expansion of the
immediate production processes and their network of transport chains, but
also of the parallel marginalization of mass poverty in the South, which was
increasingly pushed into the niches of still-intact ecosystems while,
conversely, the new regimes and middle classes of the emerging economies
began to copy the environmental sins of the metropolis. In the same way as
the previous cycle had used the world-wide resources of labour power
remorselessly, so the exploitation of ecosystems was now carried
relentlessly to extremes. Without doubt there have by now been considerable
efforts to start 'ecologizing' capital reproduction but they don't yet
amount to more than a drop in the ocean. Nevertheless these small-scale
efforts, brought about by an increasing environmental awareness, have
sufficed to bring about a serious structural crisis in industrial sectors,
such as the car industry, which followed this trend either too late or not
at all.
3. Differences from and similarities to earlier world economic crises
It is essential to think about the main endogenous and exogenous factors of
previous cycles in order properly to understand the current crisis process.
But the crisis phenomena as they appear do not give us the means to think
about its further development and its possible outcome, if such speculation
is even possible at all. A supplementary glance at the largest previous
world economic crises during the development of capitalist society in its
industrial stage, i.e. during the last 150 years, will be of use. I want to
work comparatively through the differences and similarities between the
current and earlier world economic crises; this is a decisive way to
maintain the thread of thought when dealing with the complex structures and
manifestations of the present.
3.1 The world economic crisis of 1857-58
The 1857-8 world economic crisis was the first to take hold of capitalism
(as developed thus far) in a synchronous way. It started in the US, where
speculation on an immense scale in rail roads, then the leading sector of
capitalist development, caused a severe crisis. Soon it leaped to Britain
and the Northern German trading cities, as well as Scandinavia, France and
South-eastern Europe. The crisis was worsened by the initial and enormous
pro-cyclical activities of Britain, went on largely to ruin world trade, and
eventually also to penetrate what at the time were the centres of industry
and infrastructure (Sheffield, Birmingham, Manchester, the Ruhr area,
Northern France, worldwide railway construction projects etc). In the
preceding years, capitalism had completed an enormous expansion of trade,
following from the Crimean war (1853-56), and had also gone through a huge
geographical enlargement push (colonialization of California, Mexico and
Australia, deepening of British rule over India, enforced opening of China).
Thus Karl Marx anticipated a transatlantic workers' revolution in 1857-58.
But he was soon to find out that he had been wrong. The consequences of the
crisis were mostly overcome in the course of 1858 and a new period of
expansion and prosperity started and continued until 1870/71. People living
at the time emphasised the far-reaching effects of the crisis process but in
relation to later world economic crises it was rather embryonic.
3.2 The great depression of 1873-1895
The great depression started with the 'founders' crashes' [Gründerkräche],
which got underway simultaneously in several centres which were catching up
in terms of capital accumulation, starting in particular in the newly
founded imperial Germany and the Habsburg monarchy before encroaching on
Britain and especially on the US. It lasted until 1879 and turned into a
long depression that only ended in 1895. The world systems' national
economies overcame its effects in very different ways. In the US the
colonialization of the West was brutally completed, and mammoth enterprises
('Trusts') became established, taking a leading part in the advance of the
new high-technology sectors such as the chemical and electrical industries.
Imperial Germany also completed an analogous, science-intensive second wave
of industrialization, after the effects of the "Gr�nderkrach" had been
weathered. Thus the basis for a wide ranging reconstruction of the
industrial exploitation and accumulation process was established, most of
all in Germany and the US. The artisanal skills of the working class were
dispensed with, with the class as 'mass workers' subjected to the despotism
of machine rhythms and processing plants. In this sense it was the first
world economic crisis to accelerate greatly the recomposition of the
industrial exploitation process in technological and labour-organization
terms. The relation between labour and capital was placed on a whole new
basis, and this was countered by the world working class in 1905 with its
first global revolt and the development of revolutionary syndicalism
(Industrial Workers of the World). Britain and France meanwhile realigned
their colonial empires. Victorian Britain in particular destroyed the
subsistence economy of what was then the periphery, to the extent that a
hunger catastrophe followed, costing millions of lives and bringing about
the 'Third World'.
3.3 The world economic crisis of 1929-1932 and the depression of 1939-1940
There are still many enigmas surrounding last century's world economic
crisis, even though it has been extensively researched for decades. We can
take as certain that its massiveness was mostly due to the strangely
proceeding growth cycle from 1896: the 1st World War was unleashed just when
a global downturn was looming. Thus the cycle was lengthened by a global war
boom and, after the defeat of the international workers' revolution of
1916-21 and the overcoming of a massive hyperinflation period, the cycle
rose in the 'golden' twenties which were very similar to the crazy' first
decade of the 21st century: also were marked by excessive stock and credit
speculation, low mass incomes and over-accumulation in the industrialized
segments of agriculture and the streamlined industrial capital sectors. The
crisis started as an international agricultural crisis with the decline of
the most important agricultural commodity prices, then encroached on the US
stock markets in October 1929 and led to the breakdown of world trade from
1930 onwards, after the US had unleashed a global wave of protectionism with
a protective tariff law that covered practically all parts of the economy.
After that, the crisis encroached on most industrial sectors; it was
worsened from 1931/32 by a banking crisis which had originated in Europe and
which was followed by a race to devalue the major currencies, leading to the
halving of GDP and to unemployment of between 25 and 35 percent in all
industrial countries. All attempts to overcome the following depression
failed, even the American 'New Deal'. The situation reached the point of a
global economic war, radicalized by the armament and expansion policy of the
centres of the fascist axis: Germany, Italy and Japan. This big crisis was
only overcome from 1938 onwards with the international arms race and the
armament industries of the second world war, starting in Europe and reaching
the US from 1940 onwards. Such a catastrophic outcome of the crisis was by
no means inevitable. Thus it should help us, as we debate the currently
expanding crisis, to realize that it is our task to propose and push through
ways to overcome the crisis which obstruct the path into a new world
economic war and which can be used as levers for a socialist transformation
of the world system.
4. Global Proletarianization
Before focusing on this question, we should ask who could be able to force a
way out of the crisis, a way which does not lead into capitalist barbarism
once more, but instead widens into a prospect of socialist transformation.
It can be only those classes and layers which have to sell or divest their
labour power to the capitalist machinery of accumulation and regulation in
order to survive: all those of this world who own nothing and who form the
constantly changing multiverse of the global working class.
4.1 Historical and methodical premises
This approach is anything but self-evident, so I would like to illustrate it
further. It is based on a conception of global working class derived from
the critique of the 'national' and 'eurocentric' perspectives of labour
historiography, and from advances in the Marxist understanding of labour and
4.1.1 Processes of global proletarianization and de-proletarianization
Global labour history is a very young branch of labour history, but it has
nevertheless delivered some important results. It is now understood that
from its earliest beginnings, the formation of the working class took place
in global contexts. The process began in the second half of the 18th century
in the course of the transoceanic and transcontinental social revolts, which
were fought by pressganged mariners of the merchant marine and navy together
with slave labourers (Caribbean), the self-employed migrant workers of the
colonies (small peasants and artisans) and the workshop and factory
proletarians. These uprisings of the commoners in 1775-6 not only initiated
the North American revolutionary war against colonial dependency on the
British mother country, but also had enormous repercussions on the formation
of the local working class. The recognition of all this has made it possible
finally to overcome labour history's previous limitations of eurocentrism
and fixation on the trans-Atlantic perspective, to which even the best
scholars in the field, eg. E.P. Thompson, were prey. Since this first phase
of formation in the late 18th century there have been specific phases of
proletarianization and relative de-proletarianization of the subaltern
classes of the world population. These phases partly anticipated the
expansion of capital (intercontinental political and social migration) and
partly followed in their wake. The last phase of relative
de-proletarianization occurred during the cycle of welfare state-dominated
accumulation of the 1950s and 1960s, which was accompanied by a temporary
decolonization of the periphery. After 1973 it was replaced by a new wave of
re-proletarianization, about which there will be a lot more to say, given
that the internal composition of the global working class at the beginning
of the crisis provides insights about the current potential for its own
4.1.2 The multiverse of the global working class
The global working class is not dominated by 'doubly free' wage labour;
rather, since the second half of the18th century it has comprised a
many-layered multiverse. Within this multiverse, wage labour in large-scale
industry played an important and temporarily a politically dominant role,
but there has never been a prospect that it would absorb the remaining
segments of the proletariat and/or to turn them into a pure industrial
reserve army. The global class of workers up to date constitutes itself in a
pentagon of mass poverty and mass unemployment, subsistence farming among
the small peasantry, self-employed labour (small peasants, artisans, small
traders, formally self-employed science knowledge workers), industrial
labour and un-free labour relations of all kinds (slavery, debt bondage,
coolie or contract work, militarised or imprisoned forced labour, ranging up
to the working poor in the metropolis who are deprived of their freedom of
mobility, e.g. the Hartz 4 claimants in Germany). In the various global
regions these segments stand in very different quantitative relations to
each other. Between these segments of the global working class there are
fluid transitions and networks whose threads converge primarily in mass
migration between proletarian/small peasant family units on one hand and
transcontinental subcultures on the other. Referring to the young Marx, we
assume that the propertyless class is the most agent in bringing about
social, economical, sexual and ethnic equality. This is because only this
class is able, by the general abolition of property, to overcome the double
alienation of humankind from the practical processes of life and from
objectified labour, which confronts it as an alien power: as capital. This
is why the processes of homogenization and convergence within the
proletarian multiverse are our main point of reference. Thus it is a matter
not only of the abolition of wage labour, but also of all kinds of
exploitation and oppression which result from the fact that most people have
to divest their labour power in order to survive.
4.2 The current state of the global class of workers
So much for the conceptual premises. The question now is, what shape did the
internal process of class formation and class fragmentation take in the
course of the past cycle of strategic under-employment and intensified
exploitation? What are the elementary life needs of the global class of
workers and how will the class ensure that these can be met when confronted
with the looming phase of mass unemployment and mass poverty? Will the
class - or at least important parts of it - have the strength to go beyond
this defensive position and to put social and egalitarian reappropriation of
social wealth on the agenda?
4.2.1 Subsistence farming families of the global South
Today subsistence farming families in the global South and in some important
emerging economies still account for the majority of the global class of
workers, comprising 2.8 billion people, of whom 700 million are in China
alone. They reproduce themselves in family-based subsistence economies of
the Caianov type. These complex structures are interwoven with village
communities and a system of patronage. They are increasingly endangered and
are only able to survive through periodical or permanent labour income from
non-agricultural sectors (continental and transcontinental migrant labour).
Over the past cycle the basis of this group's existence was increasingly
undermined by the transformation of the most fertile cultivated areas into
mechanized large-scale farming enterprises, the consequences of climate
change, and the expropriation of land.
4.2.2 Mass migration and migrant labour
In the last decades hundreds of millions of people were on the move
continentally or trans-continentally, in order either to get away from the
mass poverty of the subsistence sector and the barbarism of civil war zones
or in order to make a living for their subsistence-farming families left at
home. Mass migration within China, mass migration from South-East and South
Asia to the Gulf region, from Africa, passing through the Mediterranean
region, to southern Europe, from Eastern to Western Europe, and from South
and Central America to North America. Ten to twenty per cent of the
underclasses of the metropolitan countries and of many emerging economies
are migrants. Over time several waves of migration have overlapped and an
everyday culture is in the making, which is cross-border, multilingual and
highly intelligent. Within this culture tendencies towards multicultural
identities and efforts for self-affirmation of ethnic identities also
overlap. During the last decades these developments have shaped the process
of proletarianization decisively, and today they constitute one of the most
important reference points of global class composition.
4.2.3 Mass poverty and the shadow-economy of the slum-cities
Not everyone who leaves the rural areas of subsistence and the regions of
civil war manages to settle permanently or even temporarily in the emerging
economies or metropolitan countries. Today this global surplus population
lives in the slum cities which exist in peripheral zones and emerging
economies. The impoverished mass of the slum cities survives within the
shadow economy at the brink of starvation-genocide and mass epidemics; they
are confronted with extreme forms of over-exploitation, which are dominated
by unfree or formally 'self-employed' labour relations. This is true of
around a billion people who populate the huge urban agglomerations, eking
out a miserable living alongside the transport routes and river courses of
the metropolises of the global South. These poor are increasingly pushed out
towards coastal and desert regions, which are threatened by natural
disasters. The transitions between the rural subsistence economies and the
communication channels of mass migration become increasingly precarious.
There is justified fear that the current global economic crisis will further
accelerate this gigantic process of slumification. And there are already
indications that urban mass poverty - with its open and hidden homeless
shelters and soup kitchens for the unemployed - is also starting to shape
the cities of the global North.
4.2.4 The new industrial working class of the emerging economies
In the past two decades the development of the new industrial working class
in the emerging economies has changed the global class composition
decisively. In the course of the last two economic cycles this class has
passed quickly through intensive processes of acquisition of technical
skills, while fighting for and winning considerable increases in income.
During the 1980s and 1990s low-tech sectors were increasingly relocated from
the old industrial centres to neighbouring peripheral countries, and the
working class of the 'extended work-bench' was relocated along with these
sectors, particularly in the textile and consumer goods industries. Due to
the levelling out of the technological divide between the former industrial
centres and these emerging economies, together with the now nearly completed
relocation of key sectors (shipyards, car industry, electronics industry,
chemical industries, textile production), the poles of class composition
between the emerging economies and the developed regions of the world system
have moved towards each other. This is also true of the precarious segments
of the working multiverse: while their numbers decrease in the emerging
economies, they grow considerably in the metropolitan countries.
4.2.5 Relative de-industrialization and casualization of the working class
in the former centres
In the past decades the industrial wage labour sector of the triad region
(USA, Europe and Japan) has shrunken significantly. At the same time its
technical composition has changed dramatically as a result of the
technological innovation which seized and transformed all manufacturing and
service sectors. In this way a lot of those sections of the working class
which were resistant and particularly experienced in struggle have
disappeared (printers, the classical manual dock worker) or their numbers
have been reduced, even in the big national economies, to a few hundred
thousand. In a parallel process, precarious and formally 'self-employed'
work has become an essential component of class composition in the
metropolitan countries. In recent years the decrease in labour income has
affected all segments, including the so-called core workforce of large-scale
industry. A quarter of all people who are forced to engage in dependent wage
labour are no longer able to maintain their living standard above the
poverty line, despite extra-long working hours.
4.2.6 Tendencies towards homogenization and fragmentation of the global
working class
Overall, in the past cycle the tendencies of homogenization and
fragmentation of the global working class have roughly balanced each other.
In all regions of the world system the small peasant subsistence economies
slumped into what may be a final crisis, triggering processes of mass
migration and the formation of a global surplus population. These processes
transformed the global class of workers, which is now generally
characterized by a transcontinental and transcultural mentality. A process
of homogenization which developed from the opposite direction was set in
motion by the waged and industrial segments of the working class, mainly due
to the now completed period of 'peripheralization' of industrial mass
But there have also been significant tendencies of fragmentation. Although
the working and living conditions have deteriorated on a world scale,
regional differences in proletarian living standards have deepened
considerably. The chances for survival at the fringe of open sewers and
waste dumps of the slum cities differ enormously from those of the
multicultural precarious workers in the metropolitan neighbourhoods. In
addition we can see elements of 'negative' homogenization, such as the
increasing fixation on religious promises for salvation and the subjugation
to mafia-type of patronage, which fortify the tendencies towards patriarchal
and ethno-political regression worldwide. It is particularly important not
to underestimate these tendencies, because they will impair our future scope
of action considerably. It is a burdensome legacy: in 1979/1980 in Iran the
social-revolutionary wing of Shiite Islam was eradicated by the
archaic-theocratic Ayatollah fraction; a few years later Islamist
organizations massacred the remaining cadres of the political left in the
Middle East and appeased the region's poor in patriarchal-reactionary
structures of social policy; today the underclasses of the US rust belts are
dominated by the evangelists; and in the slum cities the rudiments of social
security and of a minimal education system are only maintained by Chiliastic
churches with membership of over a hundred million. Even in Europe, the
traditional labour movement has abandoned the working class, the results of
which we can see in the case of Marseille, where after the exodus of the
Socialist Party the second generation of labour migrants has increasingly
turned towards the welfare office of the National Front. Undoubtedly, all of
this has meant that the return of the left to the everyday reality of the
working class has been made more difficult; a return which has become such a
pressing issue with the emergence of the current crisis. But there is no
alternative to it.
And this alternative does not seem forlorn to me. Before the onset of the
crisis we could already notice a clear increase of struggles and revolts in
which the protagonists relate to each other in solidarity, develop
egalitarian ways of action and refuse more and more vigorously to bear the
social cost of the crisis. Meanwhile we hear about mass revolts of entire
company workforces in the Chinese Pearl River Delta, who violently resist
the abrupt factory closures and the non-payment of the wages they are
entitled to. In the rural provinces of western China things are heating up
too, and the local and regional uprisings against arbitrary land
expropriations and destruction of nature and livelihood are becoming more
frequent. But also in the global north indications of a new dawn
proliferate. In Chicago and Schleswig-Holstein (Germany), factory
occupations after abrupt shutdowns of supplying companies in the automobile
sector caught our attention. In France, Italy and Greece the youth fight
back against the destruction of their chance for education, all the more so
as along with the destruction comes a dramatic deterioration of the prospect
for a professional life according to the qualifications achieved. During all
these eruptions a growing consciousness of the crisis is being forged, which
begins to homogenize under the slogan we won't pay for your crisis. Will it
be possible to extend this basic sentiment of solidarity to the workforce of
the big factories and to break the hierarchical chain of dismissals -
supported by works councils and unions - leading from the precarious workers
to the 'core work-force'? We should at least try it, under the slogan:
'three day working week? Great! - but with full wages for everyone,
regardless of job type, because we need two days a week for the takeover of
and self-management of the plant'.
Altogether we can expect another global surge of proletarianization due to
the crisis, following from the looming new wave of mass unemployment in the
existing centres of crisis: USA, Europe and East Asia. Once more millions of
people will tumble down the social abyss. How will they react? Once they
have nothing left to lose, the proletarian families, the social groups
surrounding them and the many-layered segments of the proletarian multiverse
have different options at hand: they may revolt in order to secure their
right to existence and impose an egalitarian society, but they could also
take the path of individual, familial and social self-destruction, e.g. by
restoring patriarchal violence or recharging ethnic conflicts in order to
secure their survival at the expense of other proletarian groups. Thirdly,
they could also chose the path of political regression by projecting their
fears and frustration onto executive despotism and new leader figures who
abuse the proletarians' social potential in order to secure the interests of
non-proletarian classes. In contrast to these three possible courses of
action it is of course also possible that the proletarians and
proletarianized will be content to settle for a state-interventionist reform
project to overcome the crisis. This reform project could found itself on
the still enormous potential for renewal of the capitalist social formation
and could thereby - in however limited a form - take the interests of
proletarian survival into account. How can we foster the egalitarian
tendencies of homogenization and emancipation under the conditions of global
economic crisis?
5. Outline of a programme of transition
5.1 Preliminary thoughts
We should not hook up with those who, from a radical left perspective, pin
their hopes on an acceleration and deepening of the dynamics of crisis,
expecting an automatic process of revolutionary collectivization of all
those with nothing left to lose. The conceptual automatism of crisis and
revolution has been disproved at least since the outcome of the Great
Depression in the last century. Furthermore we have learned from analysing
the processes of decolonization that the arm of criticism after its
transformation into the criticism of arms from the position of a
self-proclaimed vanguard does not necessarily lead to the longed-for
liberation, but frequently brings forth a new governing class and discharges
into bloody civil war, with the effect that the emancipatory aim is turned
into its opposite and deprived of its material basis for decades. We want to
prevent the transformation of world economic crisis turns into a world
economic war between the multi-polar superpowers, leading in turn to new
large-scale wars. At the same time we want to keep clear of emotional,
eschatological expectations for revolution focused on violence, because the
proletarian demand for revolution can also drown in class conflict turned
into civil war. There is no carte blanche for those confronted with the
realities and dangers of social degradation. This view should not be
mistaken for plea for a Gandhian path of non-violent civil disobedience.
Self-organized mass struggle to secure the material bases of existence and
the appropriation of the means of production, housing and public goods are
unthinkable without the use of proletarian violence. This aspect in
particular should be reflected on and controlled collectively as much as any
other component of the newly arising class conflict.
For all these reasons, the emancipatory perspective needs an analytically
grounded vision of social transformation, linked to programmes for immediate
action. In order to keep the crisis from leading to a reformist renewal of
capitalism or to the three possible variants of barbarism - internal
self-destruction, civil war and capitalist world economic war bringing new
large-scale wars - the perspective of proletarian self-emancipation should
be distributed across two levels of action, with interlocking effects.
First, a framework of action aiming at the radical sharpening of the
anti-cyclical programmes currently underway, and second, starting from
there, a programme to initiate a project of revolutionary transformation of
capitalist society.
5.2 Imposition and sharpening of reformist programmes to overcome the crisis
5.2.1 Owners of capital must pay for the crisis
On the first level of action, we should reverse the direction of the
government guarantees currently being provided for the financial system and
the large-scale economic stimulus programmes in China, the EU states, the US
and Japan. The greater part of the $7 trillion now set in motion must be
redirected to safeguard the existence of the world's poor, of small-scale
subsistence farming in the South, the unemployed and precarious in the
emerging economies and metropolitan countries and the industrial working
class. This must be combined with a radical reduction of working time
without wage cuts, accompanied by homogenization of working conditions.
Social systems are either to be founded (in China and other emerging
economies and developing countries) or to be upgraded again (raising
unemployment benefits to three quarters of average income, restoring
pensions and entitlements to pensions that have been cut, expanding of
education, reconstructing the health sector according to mass needs). This
transfer is not to be accomplished through further deficit spending, but
through confiscating large capital assets (from $50 million upwards) as well
as the progressive taxation of capital assets over $1 million and of all
yearly income above $150,000).
This massive top-down redistribution of wealth does not at all aim at a
general stabilization of the cycle of crisis, although it does draw on the
Keynesian refomists' attempt to balance overaccumulation and
underconsumption by raising mass income to overcome the crisis. There is an
irreducible qualitative difference between the needs and wants of the
working class and the economic category of 'mass purchasing power', and this
difference opens the opportunity for the propertyless class, as it gradually
homogenizes, to push the anti-cyclical reform policy of the groups currently
taking power beyond that policy's original intent. To achieve this, mass
action coordinated on a global scale is needed, but equally necessary is a
worldwide information campaign, which would have to avoid any institutional
ties to the projects and parties advocating anti-cyclical crisis management
within the bounds of the existing system.
5.2.2 A new global currency and reintroduction of fixed exchange rates
At the same time we ought to support a new global currency, to be composed
of a representative currency basket of national economies at all stages of
wealth. From this starting point, fixed exchange rates could be
re-established to balance under and overvaluation, standardize monetary
reserves and reciprocally stabilize balances of payment. In this way, the
overaccumulated world financial system largely vanishes. Furthermore the
lethal dollar symbiosis between Washington and Beijing, which is
increasingly sliding into the abyss, could also be overcome.
5.2.3 Democratizing economic consolidation programmes
Third, in connection to the developing global mass struggles, we should
advocate the introduction of democratically elected workers' councils into
the initial processes of resizing and restructuring the large branches of
the world economy. These workers' councils would supersede the co-managers
of bureaucratic workers' organisations (trade unions and works councils). In
the coming weeks and months the restructuring of the automobile industry
will be the top priority. Hence it seems urgent to create a worldwide car
industry workers' association on the basis of the factory occupations which
can be expected. This should combine struggles for a radical reduction of
working hours and equalized working conditions (particularly the abolition
of the gulf between core workforce and outsourced temp workers) with the
demand for an accelerated development of pollution-free and 'resocialized'
means of transport. The degree of success of this initiative will largely
decide the extent to which the working class is able to find a
self-determined solution to the crisis, and also whether a protectionist
process of deglobalization of the capital-intensive segment of the
capitalist world system can be forestalled. At the same time, these moves by
car industry workers would shape a matrix for the launch of mass initiatives
in the neighbouring sectors (energy, transport chain) and the coordination
of the objectives of their action. All this would also mean the launch of
mass learning processes, to be connected globally from the beginning and
perhaps serving as preparation for collective self-government of social life
and reproduction.
5.3 On a local, international and global level: first key points for a
programme of revolutionary transformation
5.3.1 Three basic preconditions
By pushing for and sharpening anti-cyclical reform programmes, the way is to
be cleared for a process of revolutionary transformation. This approach
makes possible collective learning processes which should generate mass need
for radical change towards emancipation and social autonomy. The transition
to socialism only has a chance if it has grown into a mass need throughout
the world.
This process needs time - several years for sure. But the transformation
process itself will also stretch over decades until the point of no return
is reached. By this stage the producers' direct self-management of the
reappropriated means of production will have created egalitarian and
grass-roots democratic ['democratic' used in this sense henceforth]
structures which will make the restoration of class rule impossible.
5.3.2 Locally and regionally: social reappropriation on a democratic
A first fundamental precondition is the implementation of democratic
structures (rearranging the trade unions to use principles of direct,
revocable delegation (Vertrauensleutek�rpermodell), debureaucratization
and cutback of the co-manager salaries of leadership; democratic
reorganization of municipal government and administration as a first step of
a general dismantling of the state advancing to the top.)
Second, tax revenue is to be redirected to local structures (as in
Switzerland, where 60 percent of all taxes are poured into the
municipalities. Once this is accomplished, the people's interest in the
self-management of their payroll taxes will be aroused, and democratic
learning processes will be coupled with legitimate self-interest.
Third, we should head for a radical reduction of working time and a
simultaneous increase and homogenization of earned income, in order to
create the disposable time and necessary resources for building up
democratic self-government. The actors in this democratic self-government
would not only push forward processes of socialization, but would also see
off the 'political class' in the process of abolishing power structures (the
state) from below.
Starting from these three basic premises it should be possible to begin
preliminary moves towards local or regional autonomy, to associate them with
local or regional segments of the workforce, and to launch a first inquiry
project about local and regional specificities of class composition.
If this is accomplished, what seems impossible today will turn into a mass
need. The actors of the local democracies will begin to appropriating the
means of production necessary for life in their region and adjust them to
their needs: drinking and waste water systems in the slum cities, local
socialization of land in favour of the landless and small peasants, but also
socialization of housing and local enterprises. Concurrently they will
embark on the local and regional socialization of public goods (social
funds, transport, education, health sector, savings banks etc). On this
basis of interdependent local and regional self-government of social life,
structures of social autonomy will finally grow which abandon political and
economic managerial elites and preclude the rise of a new caste of experts
and bureaucrats. At the same time, local processes of socialization will
link on a regional, subcontinental and continental level.
5.3.3 Foundation of international workers' federations
Without the simultaneous construction of international interfaces, the local
and regional transformation processes will not be viable in the long run.
These interfaces could most likely emerge from the transnational trade
unions suggested above, by incorporating the strategic segments of economy
into their self-organization. From the start they would have the
responsibility for linking the developing local and regional democracies on
a global scale and for using general strikes to protect them from
counterrevolutionary attacks.
During the transformation towards self-government, the transnational trade
unions should concentrate on those branches of economy that operate
worldwide and stretch beyond the regional systems of production and
reproduction, while providing for the regional council democracies
materially and establish the workers' countervailing power in the key
industries of the world system, particularly in the international transport
chain, but also the media, information technology etc. After the
socialization of the car industry, the global transport chain could serve as
a showcase, because it holds particularly rich experiences in organization
and struggles (ITF - International Transport Workers' Federation, strikes of
truck drivers and in the aviation and railroad industries). The ITF would
only have to be democratized and extended to all segments of the transport
5.3.4 World federation of Autonomy
As soon as the first council democracies and workers' federations are
established, they could approach the foundation of a world federation of
social autonomy which would serve as an interface between the council
democracies and the international workers' federations. In this world
federation the council-democratic and federated delegations of
(sub-)continents would be represented with equal rights. It would build up a
series of reconstruction and transformation institutions to overturn the
geographical imbalance of the material basis of existence, i.e. provision of
food and energy, income, education and health care. Other bodies would
concentrate on bringing about worldwide disarmament, restoring the ecosystem
and harmonizing material production as active life processes of humankind
with natural processes. Moreover a special conflict institution could aim at
overcoming power structures that have also evolved outside the capitalist
system (patriarchal domination, ethnic conflicts, racism).
5.3.5 Global Association for Autonomy
After a great deal of hesitation I have finally made up my mind to suggest
an organizational anticipation of this concept through a globally linked
association that acts on all three levels at the same time. It is not
supposed to be a cadre organization claiming to be the vanguard, but a free
and democratic association of people who have criticised, corrected,
revised, expanded and subsequently appropriated this concept to test its
usefulness in dialogue with the proletarian multiverse. The resulting
experience and learning processes will entail an ongoing correction of the
model. As soon as the proletarian multiverse makes the transition into
global autonomy irreversible the association will dissolve.
In this sense the first three simultaneous steps for the foundation of such
an association are to be determined as follows: First, local or regional
action groups and a common network of communication and publicity (internet,
regional media) are to be established in all continents. Second, the
association should participate in the constitution of the transnational
workers' federation in the key industries. Third, it should initiate a
global analysis, the form of global social reports, with particular
attention to the social effects of the crisis. In parallel, a conceptual
frame and the resulting options for action should be worked out and
constantly revised.
These suggestions seem exaggerated and utopian. But I regard concrete
utopias as an appropriate answer to a historical situation of radical
change, because this liberates us from the 'tradition of all dead
generations' that 'weighs like a nightmare on the brains of the living'
(Marx) and obstructs our view of suddenly emerging options for action. But
who is supposed to put them into practice? How can we dare to suggest a new
dialectic between the conceptual-organizational anticipation of a new
'political' class composition and the social and cultural composition of the
multiverse of the propertyless? Who gives us the right, after the decades of
defeat and strategic mistakes which made us untrustworthy in the past cycle?
But let us also consider that we are moving into a world-historic situation,
that the strategic window opens anew, so that the cards are being
reshuffled. Just as our children, nieces and nephews ask us today what we
did between 1967 and 1973, the coming generations will ask the younger ones
among us how and where they were active in the years of crisis and
depression from 2008 to 2012. Nothing is impossible. Who knows if the
Chinese peasant-workers will not dispose next spring of the state despotism
that has chained them with an iron grip since the1990s to the central debt
axis of the world economic engine? The dollar would hit rock bottom
immediately, and we would be confronted with two facts: first, the abrupt
deepening of the world economic crisis beyond the level of that in the 20th
century, and second, the emergence of a new actor on the world-historical
stage, one which has rather cowered in the first phase of the crisis: the
global working class. It could just as well happen that the mass revolts on
the horizon in China and elsewhere fail and are put down by
counter-revolution, even more violently than in the events in Turkey
1970/71, in Chile 1973, in Argentina 1976 and in Italy 1979. That would
clear the way for a scenario in which the sharpening world economic wars
could not be resolved without the opening of a new era of large-scale global
wars. Maybe such escalations will not happen, maybe the Washington-Beijing
axis will succeed in managing the crisis and introducing a new phase of
state interventionist class compromise. But in this case new options of
action would also arise, because a new cycle of the antagonism between
labour and capital would commence. We should prepare convincing arguments
for this 'mild' variant of crisis outcome, arguments which are inseparable
from the project of social equality and social progress.

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Received on Mon Mar 9 08:53:55 2009

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