A new recession: Capital demands more sacrifices from the proletariat

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Despite sophisticated means to hide the rise in unemployment, bad news on this front is arriving suddenly everywhere, even if paradoxically, as in France and the UK, there are reports of a decline in job seekers. But it is becoming more and more difficult to make people believe that all this is not so serious. As every year, the summer period was once again used by the ruling class in all countries to make serious attacks on the conditions of exploitation and living conditions of employees. But this time it’s worse. Whether behind closed doors or out in the open, with or without sedative propaganda, there are countless measures and reforms that have been planned or implemented everywhere by the bourgeoisie to deal with the accelerating economic crisis.[1]

Increase in brutal attacks

In “emerging” countries the situation of the proletarians is deteriorating very sharply. In Argentina, the peso crisis and galloping inflation are plunging the country into a very dramatic scenario that reminds us of the dizzying fall of 2001, with the increased poverty it caused for the workers.[2] In Brazil, the effects of labour reform with wage reductions are weighing heavily on the working class. And in addition, the pension system is under attack. In Turkey, an austerity plan was launched and in April there was a 32% increase in food prices. In Europe, at the heart of capitalism, the economic crisis is beginning to hit hard. In Germany redundancy plans are multiplying. Deutsche Bank announced the loss of 18,000 jobs in July, the largest “restructuring plan” in its history (20% of the workforce). Another worrying sign for employment is that “orders for machine tools, the spearhead of the economy, fell by 22% per annum between April and June”.[3] But job losses are already spreading to almost all sectors: supermarkets (for example, the merger of Karstadt and Kaufhof will lead to the loss of 2,600 full time equivalent jobs, but in reality it will affect between 4,000 and 5,000 people because many workers are part-time), 5,600 at T-Systems, Deutsche Telekom’s IT subsidiary, insurance (700 fewer jobs at Allianz), in industrial conglomerates: Thyssenkrupp (6,000 worldwide including 4,000 in Germany), Siemens (2,700 worldwide, 1,400 in Germany), Bayer (12,000 by 2121), etc...

Short-time work which had disappeared from the automobile sector five years ago is now returning in force, affecting 150,000 people.[4] In the United Kingdom, in the chaotic context of Brexit, the situation is also worsening. For example, the British banking giant HSBC is planning a restructuration with 4,000 job losses, following the 30,000 redundancies announced in 2011. The British car industry also faces around 10,000 redundancies as Ford, Honda, Nissan and Jaguar Land Rover have all made major cuts in their global workforce. In the United States the trade war and the rise in customs duties are already having an impact on manufacturing companies: “What interests us today are the reasons given by employers to justify job losses. In the last report in July, tariffs were one of the main reasons. Indeed, 1,053 reductions due to tariffs were announced in one month, from a total of 1,430 this year and against 798 in 2018.[5]

In India an industry source told Reuters that early estimates suggest that the car industry, including manufacturers, parts and dealers, have laid off about 350,000 workers since April. We could give many more examples. And yet despite all the job losses announced, unemployment figures remain strangely stable across the board. The explanation is simple. Everything is based on sophisticated statistics and new evaluation methods. In addition to the growing number of unemployed who are no longer included, the phenomenon has been totally disguised in recent years by an explosion in precarity and the deterioration in the quality of jobs. In all countries unemployment benefits are being reduced at the same time as low paid, short time jobs have increased the amount of casual work. It is these “active policies” that artificially “increase the employment rate” at the expense of the proletarians and their families.

In the United Kingdom the flexibility of the labour market and “uberisation” have boosted “zero hours” contracts, which offer no guarantee of working hours. Employers are free to draw on these workers as they see fit, depending on the needs of their deteriorating business and declining order books. In Germany the Harz reforms of 2003-2005 allowed the development of casual work at 450 euros per month, and these jobs are now increasing. In many other countries, such as Sweden, part-time, low-paid fixed-term contracts have grown strongly. In the Netherlands, “zero hours” contracts and German-style “casual work” are also on the rise. In Portugal, the “recibos verde[6] and in France so-called “self-employed” status go in the same direction, that of increasing precariousness. Everywhere, for those who still have a permanent contract, layoffs are facilitated. Today these measures, which were taken in the 1990s and especially after the 2008 crisis, are bearing fruit and are progressing at an ever faster pace as a result of the crisis. To limit the decline in profit, capital is constantly increasing the exploitation of labour power which leads to a sharp deterioration in the living conditions of the working class: so inequality and poverty are constantly increasing.[7]

This increased greatly during the summer. This is partly visible through strikes, which affected some sectors such as Amazon in Europe and the United States in July, or in different airlines in Spain or Italy for example. The strikes were provoked by a deterioration in contracts and pay levels.

Working conditions are therefore becoming less and less tolerable: “We have so many people out of work that we accept harmful working conditions, like a kind of sacrificial act”.[8] The fear of losing one’s job generates various pathologies and the terror at work causes suicides or irreparable damage: “We have ‘top’ managers whose brains are permanently damaged and who will never be able to work again. It is a premature wear and tear of the body due to mad levels of over-use[9]  Of course, while more and more workers are damaging their health at work it is also increasingly difficult to get treatment, when it is still possible to do so. The attacks on the hospital sector will not reverse this trend. Such attacks on health services have been seen over many years in Britain and France is seeing a new measure attacking its hospitals called “Ma santé 2022”.[10]

Unlike the years following the Second World War when the anaemic labour force had to be rebuilt for reconstruction by developing the “welfare state”, today’s overabundant workforce whose costs have to be lowered to maintain “competitiveness” no longer requires the “luxury” of adequate social and health coverage.

On the other hand, the duration of exploitation of the labour force is constantly being extended. Pensions are being violently attacked everywhere. The retirement age is rising everywhere and pensions are steadily being eroded. In Germany the retirement age is being increased from 65.5 to 69 by 2027, in Denmark from 65.5 to 67 this year and to 68 in 2030. In the Nordic countries, such as Sweden or Norway, a so-called “flexible” system will encourage later departures and this is also the case in France. In the United Kingdom, the law even encourages people to work until they reach the age of 70. In practice, low pensions are increasingly pushing older people to work. In the United States people over 80 years of age are still in work. In the face of the new open crisis that is looming one thing is certain: proletarians all over the world will see their situation deteriorate sharply and the future will therefore only get darker.

Entry into recession

All this has become all the more pronounced as the global situation of the world economy has further deteriorated: “On the economic level, since the beginning of 2018, the situation of capitalism has been marked by a sharp slowdown in world growth (from 4% in 2017 to 3.3% in 2019), which the bourgeoisie predicts will be worsening in 2019-20. This slowdown proved to be greater than expected in 2018, as the IMF had to reduce its forecasts for the next two years, and it is affecting virtually all parts of capitalism simultaneously: China, the United States and the Euro Zone. In 2019, 70% of the world economy has been slowing down, particularly in the ‘advanced’ countries (Germany, United Kingdom). Some of the emerging countries are already in recession (Brazil, Argentina, Turkey) while China, which has been slowing down since 2017 and is expected to grow by 6.2% in 2019, is experiencing its lowest growth figures in 30 years.”[11]

The summer period clearly confirms and highlights this tendency to sink into crisis. On the one hand, trade tensions between China and the United States increased sharply this summer and on the other hand the main economic indicators remain in the red. In the heart of Europe, Germany is already being hit hard by the effects of the onset of a recession, which confirms that it has thus become Europe’s new sick man. Many specialists point more generally to the possibility of a major financial crisis in the future, probably even more serious than in 2008 due to the record level of debt accumulated since then and the weakened position of the state in this regard. As we also point out in the resolution from our recent international congress: “Concerning the proletariat, these new convulsions can only result in even more serious attacks against its living and working conditions at all levels and in the whole world”.[12] Even if not all states carry out attacks at the same intensity and pace, all must adapt in the same way to the conditions of competition and the reality of increasingly glutted markets. States must also make drastic cuts in their budgets in order to make savings at all costs.[13] And in the end, the ruling class is making the proletariat take the load of its desperate efforts to curb the effects of the historical decline in its mode of production. As always it’s the working class that must pay the price!

What perspectives for the working class?

The proletariat is exposed to the blows of attacks which are already planned and those to come in the future. Sooner or later, it will have no choice but to react with a massive and determined struggle. But for this to happen it will need, on the one hand, to develop the conditions for in-depth reflection in order to better understand how the bourgeoisie is preparing to face the class struggle, and on the other hand, to try to define how to effectively conduct the class struggle inside and outside the workplace. This means going back to the lessons of the proletarian movements that have taken place in the past, in history, and particularly during the period between 1968 and 1989. This means taking into account the traps and mystifications orchestrated by the class enemy in order to better identify them in the future and not to be caught out by them again. The working class needs to become aware of its strength, to break out of isolation of struggles by countering the state’s democratic propaganda and the manoeuvres of trade unions, especially in their most radical and pernicious forms. In addition the proletariat must always remain vigilant against the dangers that threaten the autonomy of its struggle. In particular, it will have to fight against the influence of alien class ideologies belonging to the intermediate layers, in particular the petty bourgeoisie, which are a way of diluting the class, which risks being drowned in the undifferentiated mass of “the people”, an abstract notion. The interclassist movement of the Yellow Vests in France, mixing isolated proletarians with the petty bourgeois layers, is in this respect one of the most significant examples of the growing dangers facing the proletariat. Far from being a model of struggle, this movement has been its antithesis because it has been locked into the democratic values of capital and in its nationalist or even xenophobic prejudices.[14] On the contrary, only proletarian methods of struggle, from strikes to mass assemblies, provide the conditions for a truly autonomous and conscious movement that can raise the perspective of revolution and an end to class exploitation. 

WH 17.8.19


[1]. Those who read French can see our article on the attacks in France on our French language website https://fr.internationalism.org/content/9947/bourgeoisie-profite-des-fai....

[2]. The Argentine peso was at parity with the dollar at the beginning of the century; it is now worth only about 0.02 dollars. Prices have increased over 50% over the last 12 months. The IMF’s loan of 57 billion in 2018 was granted only in exchange for a plan of drastic austerity and severe budget cuts that have already caused 5 general strikes since the beginning of the year. According to official statistics, one third of Argentines already live below the poverty line (Web source: BFM Business August 13, “Argentina: the descent into hell of the 3rd largest economy in Latin America”).

[4]. Not to mention Volkswagen’s new plan to cut between 5,000 and 7,000 additional jobs by 2023 (more than 30,000 since 2017) or Ford-Germany’s plan to cut 5,000. In addition to 570 redundancies, Mercedes-Benz is eliminating temporary and fixed-term contracts.

[6]. The ‘recibos verde’ is a green form that has to be filled in by freelance or self-employed in Portugal.

[7]. Since 1982, fixed-term contracts have doubled and temporary employment has increased fivefold!

[9]. Idem

[10]. Even in 2012, a third of the population in France had to give up care for financial reasons, 33% more than in 2009 (according to Europe Assistance-CSA).

[11]. ‘Resolution on the international situation’ from the 23 ICC Congress (https://en.internationalism.org/content/16704/resolution-international-s...)

[12]. Idem

[13]. See ‘The reality of poverty in Britain’ (https://en.internationalism.org/content/16682/reality-poverty-britain) for more on attacks in the UK.

[14]. See ‘The “Yellow Vest” movement: the proletariat must respond to the attacks of capital on its own class terrain’ (https://en.internationalism.org/content/16609/yellow-vest-movement-prole...).



Economic Crisis