Europe's social and political crisis

By Heiko Khoo
0 CommentsPrint E-mail, September 13, 2010
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In the decades following the Second World War, a Social Democratic model dominated Western Europe. It was the result of two main factors: the external fear that Soviet Union and Eastern Europe would influence the peoples of the West with their model, and the internal fear that the working classes would revolt unless capitalism provided extensive social benefits, including health care, education, reasonable pensions and welfare rights. The public sector, planning, and social policy all began to play an increasing role in society.

This policy shift was also a reaction to the chaotic slide to catastrophe, barbarism and slaughter that was the direct consequence of the 1930s Great Depression. The economic collapse caused deep social divisions expressed in clashes between the working classes and the rulers. Socialists and fascists clashed in a struggle to control the streets. After Hitler took power in Germany, imperial ambition ran amok. Capitalism, in ferocious Nazi form, sought to crush the USSR and enslave the peoples of the Europe.

The post-war Social Democratic consensus remained largely intact until the 1980s, after which it was weakened by the neo-liberal drive to free markets. Since that time the role of global finance has been greatly enhanced and production has been globalised, severely undermining the traditional power base of organized labor. The collapse of the planned economies of the Eastern Bloc 20 years ago also undermined the case for socialist policies in the west.

In the recent Great Recession, a 1930s-type collapse was avoided by international governmental action to nationalise bank debts. But the burden of this gigantic bailout is now being heaped onto the shoulders of the working classes, undermining the entire post war model of class consensus. To restore capitalist profit rates, a draconian programme of cuts in the living standards of Europe's workers is underway.

This year has already seen angry public sector general strikes in Greece, Portugal, Italy, Spain and France. All over Europe, social unrest and class conflict is the order of the day. The discontent is galvanized by the fact that the people being made to suffer were in no way responsible for the economic crisis. It is small wonder that people take to the streets when the age of retirement is suddenly increased, their terms of employment are worsened and their jobs are threatened. Most people had become used to the idea that you retire from work before you die!

If European governments get their way, average living standards will fall by 10, 15, or even 25 percent. For the newly unemployed, the fall will be far greater. We are witnessing the breakdown of the entire post war way of life and the end of the expectation that things steadily improve from year to year, decade to decade, and from generation to generation.

Governments have so far been able to get the public sector cutbacks passed through parliament, assisted by the mainstream media and "experts" who almost universally argue that "there is no alternative". At present, the grass-roots revolts lack the leadership, power and determination required to stop and reverse the process. It is possible the disputes will escalate to the point where governments are forced to concede to demands from the street, or fall from office. In these circumstances concessions granted will embolden protestors all over Europe. But at the moment there is clearly a far more coordinated Europe-wide attack against the workers than a unified campaign of defence by the workers.

In excluding any alternatives to cutbacks in social spending, European governments feign ignorance of the significance of what is happening in China. Even those who are supposed to be socialists or social democrats often ignore facts that are staring them in the face. Rather than cutting living standards during the Great Recession, China's government and its public sector banks and corporations invested and expanded spending on health, education, infrastructure and pensions. As a result, general living standards rose. China's policies overcame the worst impact of the world economic crisis and attained precisely planned growth targets, in spite of the almost universal derision and scepticism of western "experts".

The working people of Europe, facing a reversal of all that has appeared normal and natural for decades, may ponder more deeply the root of the Chinese economic miracle than the "experts".

The Chinese economy has been considerably strengthened during the biggest global economic downturn since the 1930s. This "miracle" is rooted in the fact that the public sector in China dominates the commanding heights of the economy. In fact, the past two years have seen a significant growth in the influence of the public sector in China. If European trade unionists, social democrats, and communists study the role of the public sector in China, they will be able to develop the alternative economic policies they need in order to counter the myth that there is no alternative.

The author is a columnist with For more information please visit:




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