European revolts confront economic and political crises

February 7, 2011

by Ron Kelch

In one of the biggest demonstrations in Ireland since its revolutionary birth in 1916, 100,000 marched in Dublin on Nov. 27 against the terms of an 85 billion euro loan package put together by the European Union (EU) and the International Monetary Fund (IMF). The marchers were outraged over the Irish government agreeing to new taxes on workers, huge spending cuts in public sector services, as well as a 1 euro decrease in the hourly minimum wage, which will drive wages down for all workers.


As one marching mother put it: “It’s not the short-term, immediate pain that worries me….I don’t want my toddler to end up in a sweatshop.” The Irish economy, which has already shrunk 15% since 2008 with unemployment stuck at over 13%, now faces the specter of a more protracted downward spiral, accelerated by the “rescue” loan, which will have to be repaid at a crushing 6.7% interest.

A prominent sign at the demonstration read in German “6.7% Nein Danke!” (No Thanks) because Germany has insisted on punitive terms for rescuing Eurozone countries who were the victims of speculative finance capitalists. Ireland had no substantial problems with public debt or deficit spending. Indeed, with a public debt of just 12% of gross domestic product (GDP) in 2007, it was more fiscally prudent than even Germany, whose debt was 50% of GDP. Ireland ran up a huge debt with a $70 billion bailout of its banks, in hock to mostly foreign bondholders who were facing huge losses after the 2008 collapse of their speculative real-estate bubble. Foreign bondholders repaid Ireland by betting against the government’s ability to pay its debt, driving up interest rates and precipitating the present crisis.

The impact of the kind of economic hole into which the Irish are being forced to dig themselves is already being felt in Greece, where workers staged a seventh general strike on Dec. 15 against draconian austerity measures still going into effect after their “rescue loan” in May. After Ireland and Greece, bond dealers are now eyeing Portugal, Spain, Belgium and even Italy. The only alternative for these countries may be default on their national debt and the breakup of the Eurozone. In any case there will be an even deeper economic contraction in Europe that will impact the feeble global economic recovery.

European economic integration, including the eventual introduction of a single currency, was promulgated after World War II to foster “human solidarity” and put an end to Europe’s plague of bloody nationalism and permanent war. The revolution that led to Irish independence was against their British imperial overlords then thoroughly embroiled in World War I. It helped to inspire the anti-capitalist revolts in Russia and the rest of Europe. Will a new internationalism and genuine human solidarity emerge now that Irish workers, along with their Greek counterparts, are again leading the fight for autonomy and self-determination–this time against global finance capital?


In an expected Irish election this year, there is an impending political upheaval against Fianna Fail, the party that kowtowed to transnational finance capital and, under the banner of preserving national sovereignty, has dominated Ireland for most of its existence as an independent state. However, only part of the opposition coalition that is expected to win is even raising the issue of renegotiating the terms of the EU loan.

In neighboring England, which is outside the Eurozone and not subject to its rules, tens of thousands of students marched on Parliament on Dec. 9, the culmination of a nationwide student movement involving millions in occupations and demonstrations against the tripling of university fees to $15,000 per year. The measure passed, but the new Tory-Liberal Democratic coalition government may have a short life because 21 out of 57 LibDem MPs broke ranks and voted no. They couldn’t abide by the total hypocrisy of their party, which had appealed to the youth in the election by promising to abolish university fees. “We’re all here,” one student said, “because we’re passionate about this. We feel betrayed.” Many students were bloodied by police truncheons as they struggled to confront lawmakers directly in Parliament Square.


The exorbitant fees will now exclude most workers’ children from a university education. Those who persist will be saddled with lifelong debts while the government deepens its austerity program, which it says is necessary after rescuing private banks from their debts. Student demonstrators held up poster-sized covers of their textbooks to emphasize that education is not a business proposition. They included books of Marxist and other critical thinkers, looking for an alternative to capitalism. Though these demonstrations shook up British politics, even giving the British royals Prince Charles and Camilla a scare by tarnishing their Rolls Royce, an alternative is not to be found in the opposition Labour Party. Labour leader Ed Milibrand was mostly nowhere to be found, but when he did say he opposed the bill, what he put forward was not an alternative course but rather the political “lesson” not to make “a promise that I am not sure I can keep.”

Similarly in France, President Nicolas Sarkozy saw his popularity plummet to an all-time low of 29% after demonstrations and strikes enlisted millions of workers and students in the weeks that led up to passing, on Nov. 10, a key part of his austerity agenda–raising the minimum retirement age from 60 to 62 and the age for a full pension from 65 to 67 (see “French workers vs. state and union leaders,” N&L, Nov.-Dec. 2010).

France’s political climate has changed since Sarkozy came to power after demonizing French youth from North Africa as “scum” when they revolted in 2005 against police abuse and lack of economic opportunity. But, again, the revolt on the ground is searching for a way out of the logic of capitalist rule in its latest form of finance capital, which seems so far to be able to keep all the players in the political arena in tow.


The financial crises and revolts in Ireland and the rest of Europe are the latest fallout from the September 2008 meltdown of capitalism’s global system of finance, after which the world’s political leaders worked together with a no-holds-barred infusion of cash from state treasuries to bail out the banks in the name of evading a total collapse of the financial system and another Great Depression. In this moment of what Marx once dubbed “capitalist communism,” the financial sector’s tremendous losses, which had been tallied as years of fictitious profits, were transferred to workers, who continue to experience depression-level unemployment and are now the designated owners of the bloated national debts. This outrageous reversal of fortune and totally inverted justice keeps spurring new revolts and a search for an alternative to capitalism’s business and politics as usual.

The disappearance of fictitious profits revealed a much lower rate of profit being generated in the real economy, where now finance capital, which is again making record profits on paper, is conducting a class war to boost profits. During the speculative bubble, consumers in Europe and especially the U.S. were hailed as the heroes of the world economy, but they are now considered profligate. Once the state was used to save the finance sector, there was no place for the further Keynesian state intervention to boost demand because, for capitalists, workers demand too much and not enough demand is directed to capital goods for capital to accumulate.

Like the economic integration of Europe under the EU, it has been an article of faith that globalization, or globally integrated production, will stave off a drift into war in an economic crisis. Yet while finance capitalists practice solidarity in saving their status as lords of the universe and in waging class war, the now evident collapse in the rate of accumulation has also brought new tensions over trade between competing centers of finance capital like the U.S. and China. In the trade arena, German and Chinese mercantilism are called “acts of war,” as are U.S. efforts to devalue the dollar by flooding the world with its currency.

The trade war between centers of finance capital is background to competition over real weapons. Skirmishes, as on the Korean peninsula, can set off a nuclear war (see “Back to the nuclear brink” this issue).

China and Japan’s clash over a Chinese fishing boat resulted in China’s rulers withholding rare earth elements crucial to Japan’s high-tech car components. This scared the Pentagon because those elements are critical to smart weapons, even as worries mount about a new Chinese missile that can take out U.S. aircraft carriers. China’s neighbors, who were asserting their independence from the U.S., suddenly lined up behind U.S. imperialism and Secretary of State Hillary Clinton’s gunboat diplomacy in the area.

The very day U.S. Defense Secretary Robert Gates showed up in China in January to meet Chinese president Hu Jintao to try to promote friendlier relations with China’s People’s Liberation Army (PLA), the PLA sent its own message by testing successfully its first stealth fighter jet, purportedly unbeknownst to Hu and the civilian leaders.


As seen in the Republican victory in the U.S. House of Representatives, the outrage over bailouts and economic hardship can also turn to national chauvinism and racism, attacking Muslims and blaming economic problems on immigrants and unionized workers. The result is that President Obama has acclimated to what he once denounced: “the new normal” of the deepest long-term unemployment since the Great Depression. Obama joined the drive to make workers pay for the exploding debt from the cost of wars and tax cuts for the wealthy, by entertaining deficit reduction plans that cut Social Security and Medicare as well as going after the pay and benefits of workers in the public sector.

That is why, for Marx, the significance of political upheavals is only as they reflect the struggle for self-determination in everyday life, where alienated labor is the source of all value and surplus value that manifests itself as profit for the capitalist.

As we put it in our Sept.-Oct. 2010 Editorial, “Capital on Strike“: “The totality of the present crisis calls for a return to Marx’s philosophy of liberation. Marx predicted today’s total contradictions of growing permanent unemployment and a falling rate of profit engulfing capitalism. However, what was essential to him was not proving those economic outcomes but rather working out its opposite in the struggle of laborers, employed and unemployed, against being alienated from their own labor and social lives in this inhuman system.”

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