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The Emperors Are Naked | The Nation

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The Emperors Are Naked

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The plans painstakingly prepared by the master builders of Maastricht now lie torn to ribbons. The once mighty mark is showing signs of wear under the strain of German reunification. The French franc, which wanted to take advantage of the circumstances to show a degree of independence, was at once bitterly reminded of the tale about the frog that wished to be as big as a bull. The monetary union that the members of the European Economic Community were to set up together before the end of the millennium now looms terribly distant on the horizon, and not only because of legal difficulties the treaty faces in Germany. Of the twelve countries within the E.E.C., only Luxembourg now fulfills all the criteria required to join the projected union. Meanwhile, the gospel of free trade is being questioned m "respectable" quarters, and Parisian heretics even dare to plead in favor of protectionism--if not national then at least European.

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Daniel Singer
Daniel Singer, for many years The Nation's Paris-based Europe correspondent, was born on September 26, 1926, in...

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It is a battle royal, and it foreshadows many more like it in the struggle for the economic mastery of Europe.

Such disorientation within the establishment is due to the deepening economic crisis, strikingly illustrated by the spread of mass unemployment. The latest report on the subject from the Organization for Economic Cooperation and Development (O.E.C.D.) admits that, with 36 million jobless amid the twenty-four member countries (which include the United States and Japan), or roughly 9 percent of the labor force, unemployment beats all previous postwar records. Among the twelve European members of the E.E.C. the situation is even worse, the share of the jobless averaging 12 percent and reaching over 20 percent in Ireland and Spain. As always, official figures belittle the real plight, since they do not include those working part time against their will or those who, after years on the dole, have been more or less permanently driven out of, or written off, the labor force. The establishment is getting perturbed because unemployment is approaching potentially explosive proportions.

What makes the situation so grave is that the classical downturn in the business cycle comes on top of a structural crisis. The depression is still gaining ground in Germany and France. Throughout Western Europe the contraction has been aggravated by the high interest rates imposed by the Bundesbank to attract foreign investment and to check inflation by keeping wages down. German bankers viewed the high rates as a way to cope with the takeover of the eastern regions, but for the other countries of the E.E.C., trying to extricate themselves from the depression, these were catastrophic deflationary measures. And no country could lower its own rates so long as its currency was tied to the mark in the exchange rate mechanism (E.R.M.) within the European Monetary System. Speculators in currency saw the contradiction, and their trading last autumn precipitated a tide that swept the lira and the pound sterling from the monetary system and forced the devaluation of the Spanish peseta, the Irish pound and the Portuguese escudo. Although interest rates are now much lower, the same contradiction was at the heart of last week's confrontation between speculators and central banks.

The economic debilitation is so serious because it affects bodies badly weakened by previous bouts of the disease. Ever since the mid-seventies, which marked the end of the postwar era of unprecedented prosperity, employment has risen during periods of recovery but has not come close to where it had been at the beginning of the previous downturn. Mainstream economists assured us that restructuring would not last long and would be limited to old sectors of industry such as coal, steel and textiles. Indeed, for a time the service sector did provide an outlet for some of the surplus labor. But our perestroika proved both permanent and all-pervasive. It is now the turn of banking and insurance to have staff reduced through "rationalization." Unemployment is no longer just the scourge of the young, the female, the unskilled. One of the reasons for the present outcry is that the sacrosanct "middle class" is badly affected.

Spokespersons for the establishment have, therefore, changed their tune. If Europe wants to compete and survive, they now maintain, it must cease living above its station. It can no longer afford a welfare state with a universal, publicly paid health service and other safety nets. To provide jobs it must follow Reagan's example by breaking the power of the unions, widening differences in income and increasing the number of the "working poor." Britain's John Major pleads it plainly, while the representatives of the international organizations do so in more ambiguous terms. Thus Britain, which has tried to practice what it preaches, figures fairly low in the production table and rather high in the unemployment table of the European league. The O.E.C.D., meanwhile, which advocates "wage flexibility," shows in its July Economic Outlook the absurdity of such a proposition. In the third quarter of 1992, it reports, monthly wages averaged $1,790 in the former East Germany (where those lucky enough to have a job are tending toward parity with the West); in Poland they amounted to $189 and in the former Czechoslovakia to $169. Do the pundits seriously suggest that to prevent, say, the car manufacturers from investing just beyond the German frontier, the workers should accept a tenfold cut in wages? Flexibility is simply the latest refrain on the old capitalist logic: To get out of a crisis you must slash wages and boost profits.

But if Europe's ruling conservative parties are in disarray, the posture of social democrats is hardly more comfortable. They cannot accept the new model, cannot resign themselves to the offensive against welfare and wages without losing their function and their justification, especially where they have connections with strong labor unions, as in Germany. On the other hand, they have accepted not only the framework in which the contest is to be waged--i.e., capitalist society--but also a battlefield that is particularly inconvenient. In a Europe no longer sheltered by tariff walls, in which internal instruments of control have been blunted by more than a decade of deregulation and where capital can flow freely wherever it chooses, the weak "social chapter" in the Maastricht Treaty would hardly protect labor from the onslaught. The blackmailing threats from employers who say they will move from country to country or beyond the frontiers of the E.E.C. altogether are not entirely empty.

The drastic cut in the power of Europe's nation-states in recent years has not been coupled with a corresponding growth of a European state. This trend, shrinking the instruments of intervention, has reduced the scope of various governments to stimulate production by Keynesian methods. The resultant boost from such methods would be quite useful at this stage, yet even that--were it possible--would not be sufficient to cope with the present dilemma.

The current crisis is of another dimension. It reflects the accumulated disjunction between our technological inventiveness and our imbecility in social Organization. Productivity today is incomparably higher than it was before the last war, and the prospects for further progress are tremendous. But in terms of hours spent at work (especially adding transportation) the change is barely noticeable: The forty-hour week was a conquest of the French Popular Front fifty-seven years ago! We are living in a system that, in its search for profits, is driven to raise productivity and to reduce the hours of work needed to create a commodity; it is also driven to invent profit-yielding jobs, a duty it finds increasingly difficult to perform. In any case it is a system intrinsically unable to set itself the task of abolishing the frontier between labor and leisure.

Some thinkers connected with the Greens, Andre Gorz for instance, have grasped the momentous nature of our predicament and stress the extent to which we have reached the stage prefigured by Marx in his Grundrisse. Yes, "the theft of somebody else's labor time, on which wealth now rests, appears a miserable base" compared with the means at our disposal. Marx argued that to take "working time as the standard of wealth is to base wealth on poverty . . . reducing time as a whole to working time and degrading the individual to the simple role of the working man, dominated by his labor."

We now have at our disposal the material means to put free time at the heart of a different social organization, in which "the surplus labor of the masses will no longer be the condition for the development of general wealth as the leisure of the few will cease to be the condition for the full development of the human brain." Taking the advanced Western countries in isolation--something that can be done only in the abstract--we are already today technologically ripe for such a transition to a qualitatively different society. What in Marx's day was utopian is now realistic.

Yet even the writers aware of the new nature of the confrontation do not go far enough. True, as they say, the time required to insure production for our material needs has been greatly reduced and can be cut much further, but they argue as if one could leave this material production in capitalist hands, obtain a dramatic reduction of the hours worked by some form of legislation and in this way allow society to reorganize itself. The snag is that capital has its own logic. If its reign is perpetuated in the factory and the office, it will also prevail in society at large. This is why, to face the prospect of mass unemployment, the left has to tackle the problem of property and of the division of labor in both factory and office. It will have to invent new forms of self-management on the shop floor and new methods of democratic self-organization on the national scale. Only thus will it be able to embark on a road leading gradually and ultimately to elimination of the barrier between work and leisure. A tall order? Undoubtedly. Yet it is only by breaking the existing framework that the left can emerge victorious from this confrontation over employment. If it sticks to the terrain chosen by the enemy, it will be squeezed into oblivion.

The battle for Europe, in other words, is not mainly concerned with the speed at which the Maastricht Treaty might be ratified or with the now more than doubtful date when the member countries should have a common currency. The key question is not even whether Germany can swiftly emerge from the throes of reunification and forge a capitalist bloc capable of competing with its Japanese and American rivals. Fundamentally, the battle is merely the first stage of a much wider struggle, which cannot be confined to Europe, Western or otherwise: our common struggle for a different society, international by its very nature. The apparent paradox is how quickly after the fall of the Berlin wall this issue has been put on the historical agenda.

The collapse of the former Stalinist empire in 1989 was hailed as the great triumph of capitalism, and even by some zealots as the end of history. The illusion was surprisingly short-lived. Shorn of its alleged enemy, forced to parade on a global stage, the system was shown in its nakedness. Its treatment of human resources has helped to reveal its true nature. The expansion of capital into the Third World had already smashed existing structures, provoking mass migrations of people from countryside to shantytowns and, wherever possible, beyond to a more prosperous world. Now, with capitalism trying to replace the difficult-to-define system that prevailed in the Soviet sphere, a huge new reserve army of surplus labor is being built. Facing these two currents, the Southern and the Eastern, stands a Western world no longer dependent on immigrants for its development, indeed no longer able to provide employment for its own labor force. Western Europe is attempting to become a strange fortress, ready to export capital but not to admit foreign workers.

Something is obviously wrong. Even the eulogists of the establishment sense that, deprived of its role as protector from the "red peril," it has no clear part to play. The whole system is badly in need of an overhaul and, short of it, of a whitewash followed by new forms of dissimulation. In countries where the state of corruption is too blatant to be concealed the ruling class has already been driven to action. From Italy and Japan come successful lessons on how to pour old, tasteless wine into new, postmodern, "reformist" bottles. Our rulers, more shaken than they pretend, are cheered by their temporarily valid assumption that you can fool most of the people most of the time. One hopes not forever.

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