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In the aftermath of the general elections of 22 September 2013 in Germany, the Chancellor of the Federal Republic, Angela Merkel and leader of the Christian Democrats, is presently negotiating the formation of a Grand Coalition with the Social Democrats. The new government will be the third in a row under the Chancellorship of Merkel. The first one was also a Grand Coalition with the second largest party in the Bundestag, the SPD. The second one was a coalition with the small liberal partner, the FDP. One of the results of the recent elections was that Merkel lost her coalition partner. For the first time since the foundation of the Federal Republic after the Second World War, the Liberals failed to gain entry to parliament. At the moment of writing, the formation of a coalition of the Christian Democrats with the SPD appears to be by far the most likely outcome. The course of the negotiations between these two parties already indicate that, although the Christian Democrats have a much bigger share of the seats in parliaments, the new coalition with the SPD, if it comes into being, will be “written in the handwriting of the Social Democrats”, as the media have already declared. In other words: the programme of the new government will not be to immediately and frontally attack the working class, although these massive attacks will of necessity follow in the course of time.
By far the most remarkable result of the recent elections however was the fact that the Chancellor and her party, who have already ruled the country for two full terms of office, could celebrate such an electoral triumph. In a country which, since the war, has, with one brief exception, always been ruled by coalition governments, Merkel came close to gaining an absolute majority – for Germany a sensation. This is all the more remarkable since, in most of the other countries of Europe, the economic situation is so serious, and the need to attack the working population so acute, that any government, whether of the left or the right, tends to rapidly lose popularity and even credibility and thus to be sent back into opposition at the next elections. This at least is the form which the social safety valve of capitalist democracy presently takes in Europe: The anger of the population is canalised and neutralised into a “protest vote”, which, for the “political class” has the consequence that the long-term continuity of a given governing team becomes increasingly unlikely. A dramatic example of this development is France, where the left wing government of Francois Hollande, not long ago celebrated by the media as the new hope for the working people of the whole of Europe, has suffered after only one year in office an all time loss of public sympathy. But what we see in Germany is the contrary development, at least for the moment. The question is: how is this to be explained?
Merkel profits from the heritage of the Schröder government
Perhaps the most important “secret” of the lasting electoral strength of Angela Merkel lies in the fact that it was not necessary yet, under her chancellorship, to massively attack the population. And one of the reasons for this is that her predecessor, Chancellor Gerhard Schröder, and his left coalition of the SPD and the Greens, already did this so successfully that Merkel is still reaping the rewards. Schröder’s so-called “Agenda 2010”, unleashed at the beginning of the new century, was a huge success from the point of view of capital. It succeed in reducing the global wage bill of the country so radically that its main rivals in Europe, such as France, publically protested against the “wage dumping” of the continent’s leading economic power. It also succeed in enforcing an unprecedented “flexibilisation” of the work force, in particular through a breathtaking development of precarious employment, not only in traditionally low wage sectors, but at the heart of industry. Thirdly (and this was not the least of Schröder’s achievements) all of this was achieved through an attack which was absolutely massive, but not generalised. In other words, instead of attacking the proletariat as a whole, the measures were designed to create deep visions within the class, between employed and unemployed workers, between workers with regular contracts and those without. In the big factories a veritable apartheid system was established between the regular employees and the “casuals” doing the same job for only half or even only a third off the wage; in some cases they were not even allowed to use the company canteen. As a result, whereas in many other European countries such massive attacks had to be implemented without much previous planning under the hammer blows of the so-called financial crisis from 2008 on, Merkel was in the comfortable position that in Germany these measures were already in place and bearing their fruits for capital.
Another specificity at this level is that the attacks in Germany were not hatched out, for instance, by one of the infamous neo-liberal “think tanks”, but first and foremost by the trade unions. Agenda 2010 was worked out by a commission led by Peter Hartz, a friend of Schröder at the Volkswagen concern, with the direct participation of the trade union factory council of Volkswagen and the IG Metall, the metal workers’ union, the most powerful trade union in Europe, which (as many employers have publically admitted) understands more about successful management than the managers themselves. No wonder that today the majority of the German bourgeoisie, including the employers’ federations, is eager to have the Social Democrats (and with them the unions) join Merkel in a coalition government. And no wonder that Merkel, after losing her liberal coalition partner, is presently distancing herself increasingly from the ideology of neo-liberalism, singing songs of praise for the good old German model of the alleged “social market economy” (where the trade unions directly participate in running the country) and even beginning to advocate the extension of this model to the rest of Europe.
The competitive edge of German capital
Another reason for Merkel’s success story lies in the strong competitive edge of the German economy. If this competitive edge were based solely on the wage dumping explained above, it would now be melting away in face of the drastic attacks elsewhere in Europe in recent years. But in reality it has a much broader basis in the economic structure of the country itself. There is a danger for marxists, confronted by the abstract mode of functioning of capital, of themselves being mesmerised by this abstract character, and thus falling for the impression that the relative strength or weakness of a national capital depends solely on abstract criteria such as the development of the organic composition of capital or the rate of indebtedness in relation to GNP etc. This leads to a purely schematic vision of the capitalist economy, where political, historical, cultural, geographical, military and other factors disappear from sight. For instance, if you look at the growth rates or the level of debts of the USA and compare them with those of China, you can only conclude that America has already lost the race against its Asiatic challenger and might even end up with some kind of third world status. But this forgets that the USA is still the capitalist paradise of innovative “start ups”, that it is no coincidence that the centre of the new media is the United States, and that the political culture of a Stalinist led country like China prevents it from emulating its rival.
In her polemic with the revisionist Bernstein, Rosa Luxemburg (in her book Reform or Revolution?) explained that the “laws” discovered by Karl Marx concerning the rising organic composition and the centralisation of capital do not mean the necessary disappearance of middle sized enterprises. On the contrary, she explains, such smaller companies necessarily remain the heart of the technical innovation which is at the hub of an economic system based on competition and the obligation to accumulate. Germany is not a paradise for capitalist start ups like the United States (the heavy weight of its bureaucratic traditions prevent this). But it remains to this day the Mecca of the world engineering and machine construction industries. This strength is based on highly specialised, often family led companies, who pass their skills on from generation to generation, and on a highly qualified work force based on a unique apprenticeship system and on traditions which go back to the Middle Ages. In the past 20 years, in a coordinated operation between the employers’ federations, the government, the banks and the trade unions, these small and middle size machine-constructing enterprises, without necessarily increasing their size, have been transformed into world-wide operating businesses. But their base of operation remains Germany. Here again, the signature of the trade unions is evident. Whereas an employer will tend not to mind whether profits come from a plant in Germany or abroad, as long as there are profits, the thinking of the trade unions is almost viscerally nationalistic, since their primordial task is to control the work force in Germany itself, in the interests of capital, and this can best be done by maintaining industry and jobs “at home”. The metal workers’ union directly concerned, the IG Metall, is a fanatical defender of Germany as an industrial base (the “Standort Deutschland”).
State capitalism and the difference from 1929
All of this helps to explain why Germany, at least to date, has been better able to resist the terrible deepening of the world economic crisis of capitalism since 2008 than most of its rivals. But none of these advantages would have helped much had the structure of the capitalist economy not radically changed since the days of the terrible depression which began in 1929 and which ended in World War Two. At that time, the heartlands of capitalism, the most developed countries of the day, Germany and the United States, were hit first and were the worst affected. This is no coincidence. The crises of decadent capitalism are no longer crises of expansion, they are crises of the system as such, developing at its heart and naturally afflicting the centre directly. But as opposed to 1929, the bourgeoisie today is not only much more experienced, it above all has a gigantic state capitalist apparatus at its disposal, which cannot prevent economic crisis, but which can prevent the crisis from taking its natural course. This is mainly why, since the re-appearance of the open crisis of capitalist decadence at the end of the 1960s, the economically and politically strongest states have been the ones best able to resist. None of this prevents the crisis not only from coming ever closer to the historic centres of capitalism, but also from affecting these centres in an ever more serious manner. But this does not necessarily mean that there will be a partial economic collapse there in the near future like in Germany or the USA after 1929. At all events, the international and European management of the “Euro-Crisis” in recent years clearly demonstrates that the state capitalist mechanisms of pushing the worst effects of the crisis onto weaker rivals still function. Both the property and finance crisis which began in 2007/2008, and the crisis of confidence in the joint European currency which followed it, directly menaced the stability of the German and French banking and finance sector. The main results of the different European salvation operations, all the money so generously lent to Greece, Ireland, Portugal etc, was the shoring up of the German and French interests at the expense of weaker rivals, with the additional result that the workers of those countries had to bear the main brunt of the attacks. And whereas the reasons we gave at the beginning of this article to explain the electoral success of Merkel were not of her own doing, concerning this question it certainly was Merkel and her finance minister Schäuble who defended the German interests tooth and nail, so that the European partners were often driven to the brink of exasperation. And here it is clear that behind the high vote for Merkel there is a nationalist impulse which is very dangerous for the working class.
The German bourgeoisie assumes its responsibilities
There are thus objective reasons which help to explain the electoral triumph of Angela Merkel: the relatively successful resistance of Germany, at least to date, to the deepening of the historical crisis, and Merkel’s capacity to defend German interests in Europe. But the most important single reason for her success was that the whole German bourgeoisie wanted her success and did all it could to promote it. The reasons for this do not lie in Germany itself, but in the world situation as a whole, which is becoming increasingly threatening. At the economic level, the crisis of the European economy, and the wavering confidence in the Euro, are far from over – the worst is yet to come. This is why the phenomenon of Mutti Merkel, the “wise and caring mother” in charge of the German state, is now so important. According to a popular school of thought within modern bourgeois economic “theory”, economics is to an important degree a question of psychology. They say “economics” and mean capitalism. They say “psychology” and mean religion, or should we say: superstition? In Volume One of Capital, Marx explains that capitalism is based to an important degree on the belief in the magic power of persons and objects (commodities, money) invested with purely imaginary abilities. Today, the confidence of the international markets in the Euro is mainly based on the belief that somehow the involvement of “the Germans” is a guarantee that all will be well. Mutti Merkel has become a world-wide fetish.
The problem of the common European currency is not peripheral, but absolutely central, both economically and politically. In capitalism, the confidence between the actors, without which a society with a minimum of stability becomes impossible, is no longer based on mutual confidence between human beings, but takes the abstract form of confidence in money, in the existing currency. The German bourgeoisie knows from its own experience with the hyper-inflation of 1923, that the collapse of a currency lays the basis for explosions of uncontrollable instability and insanity.
But there is also the political dimension. Here Berlin is extremely anxious about the long term development of social discontent in Europe, and about the immediate situation in France. It is alarmed by the incapacity of the bourgeoisie on the other side of the Rhine to come to terms with its economic and political problems. And it is worried about the prospect of social unrest in that country, since the German working class in the past decades has developed a particular admiration for the French proletariat and tends to look to it for leadership.
It is with full consciousness of its international responsibilities that today, with the results of the recent elections, the German bourgeoisie has chosen a government which embodies and symbolises strength, stability and continuity, and with which it hopes to face up to the coming storms.
Weltrevolution (the ICC's section in Germany). 4th of November 2013.