This week’s news, especially after the massive general strike in Colombia, has continued to focus on South America. However, the most striking developments of both the economic crisis and international conflict point to Europe and Asia. The bourgeoisie’s plans in both regions unite around the attack on pensions, working conditions, health systems… and the development of militarism.
The “pro-Brazilian” governments are gradually consolidating after the revolts that pushed them into power (Bolivia) or confronted them (Chile, Ecuador).
In Ecuador, Lenin Moreno, who sees hi austerity plans cut by the legislative, renews IMF support and consolidates his government.
In Bolivia, the situation is moving in the direction of the new government. The move of encircling La Paz from El Alto, modelled on the strategy that led to the “gas war” that brought Morales to power in 2003, left six dead without achieving or extending the Masista mobilization or subduing the capital city. Today, the MAS is already negotiating the date of the elections and accepting that Evo Morales will not be a candidate.
In Chile, the bourgeoisie and its political apparatus have not yet managed to channel discontent towards the elaboration of a new Constitution. But although some demands of the workers, especially the basic pension, have been introduced into the public debate, the absence of class organization and of a struggle of their own dilutes everything in a confused mobilization of the citizenry without any end. The inevitable when the leadership of the protests remains in the “transversality” of the petty bourgeoisie. Result: a desperate situation in which the workers suffer daily coupled to savage repression in the neighborhoods. This happened precisely because workers did not appear as a class during the conflict. Repression in the neighborhoods that also affects employment: 52% of wage earners fear losing their jobs.
- “Chile y la «transversalidad»” (Spanish)
But the regional advance of the allies of Brazilian imperialism has coincided with a hard internal blow. The cause: the violent devaluation of the real against the dollar that raised the risk of capital flight and calls into question even the auctions of “pre-salt layer” hydrocarbons.
In response to the ominous economic data, Guedes and Bolsonaro proposed a radical attack against the conditions and price of labor so hard that they met with opposition from their own deputies who deemed it “excessive”. Immediately the bolsonarista stockbroker operators set out to create their own bank with the remnants, which has erroneously been presented as a party by the international press but which in reality does not even reach the minimum level of cohesion to merit such a name. In fact, after uniting the most backward of the Brazilian municipally-elected councillors, bolsonarism has not been able to give it more ideological content than the lowest common denominator of the members, true detritus of the Brazilian petty bourgeoisie. The problem is that this lowest common denominator is not even popular nor is it a basis for winning elections: it basically consists of freedom to carry arms, visceral anti-communism, anti-globalism and political evangelism. The old financial bourgeoisie and the state bureaucracy, even if grateful for the finally approved pension reform, can only feel uncomfortable… and look again at a freed Lula in who has just regained the leadership of the PT.
Pensions are the big global issue because the bourgeoisie calculates that, given their volume, its management could save a financial system ridden with banks with ever tighter margins. The universal aspiration of the bourgeoisie is to go towards a model of capitalization like the one imposed in Chile by Pinochet and which is now being questioned by the Chilean crisis at the same time as it is being expanded to Brazil by Bolsonaro. In Europe what is being discussed now is how to transition to such a model without raising a massive social response. And one of the winning formulas is the (in)famous “Austrian backpack”.
The golden standard of the “backpack” systems was the Netherlands: “the best pension system in the world” according to all the “experts'” evaluations… experts in creating ideology with numbers, that is. The Dutch model has a minimum basis: a basic public pension insufficient for survival. This is complemented by a compulsory private pension. The supplementary pension is paid as a payroll discount, like the part that goes to Social Security elsewhere, but instead of going to the public system it goes to a commercial pension plan of the worker’s choice. The problem is that Europe has been in negative interest rates for many months now, capital does not pay anymore… and Dutch pensions are falling.
This is the worst possible news for the privatization campaigns taking place in all European countries. In France, where at this point 76% of retirees are forced suffer the winter cold because they cannot pay their heating bill, the bombardment of reports was the first part of a government mise-en-scene that hopes to force a minimum consensus on pensions in the coming months. For this it counts on a general strike led by the unions on December 5 as an escape valve for social indignation. A union-led strike with its subsequent “negotiations” in which all the “negotiators” will have as their first goal the good performance of national capital… instead of the well-being of the retired and the active workers’ future.
Something similar, beyond “emergency plans,” is happening throughout the continent with health services. Yesterday it became known that half of French family doctors reject patients simply because they cannot accommodate them in the failing health system. And in Great Britain, through electoral debate, it became apparent that the real price of Brexit will be the privatization in one way or another of a substantial part of the NHS.
Fundamentally, the regional materialization of a global crisis of capitalism that provides no truce. The European Commission and then the ECB have once again called on the Netherlands and especially Germany to increase investments in order to escape a recession in the Eurozone, even if only by a hair’s breadth. It is actually wishful thinking. Private investment makes little sense when key industrial sectors such as automobiles or steel suffer a structural crisis, and public investment is unlikely to pull on all sectors when basic consumption is neither responsive nor expected to respond when the attack on wages continues as the main anti-crisis strategy. Moreover, the German bourgeoisie itself is not at all certain about the way out. It is now known that they are more dependent on the US than they thought, but they have not yet reached a consensus on a position towards their former ally now turned rival or towards China… or even towards the EU as a whole. The CDU congress today is making this clear with the confrontation between AKK, Merkel’s failed dolphin, and Merz, Schauble’s political son, the minister of “implacability” and “nordism” during the Greek debt crisis.
The European crisis’ long shadow is projected on each country. In Spain, the central bank warns that private banks are taking too many risks. The point is that, as we have already pointed out, with exhausted margins, if they want to maintain results they have to give a greater volume of credit. But that means increasing the risk of default… weakening the entire system. In other words, they have less to defend themselves against a default risk that everyone expects to increase. Because although the default of companies against banks is at a minimum of 10 years, the default risk between companies did increase, leading the former risk down the latter’s path. Result: the ECB wants mergers, so does the government, and in order to avoid the imposition of those preferred by the regulator, the bankers enter an invisible war. Meanwhile, Goldman Sachs has once again lowered the country’s growth expectations.
China and the US embattled in their trench warfare
In the bigger picture, the trade war between the US and China does not even provide a partial truce before the 15th when the new wave of US tariffs is scheduled. On the contrary, the pressure of American power against Asia is unleashed. The US is arming Vietnam for free to build up military friction with China in the waters of the disputed China Sea. And despite Chinese complaints combined with the presence of Beijing’s first aircraft carrier in the Taiwan Strait, the US is renewing and strengthening its navy in those waters.
- “Vientos de guerra en el Mar de China” (Spanish)
It is no wonder that U.S. military acceleration is dragging its former allies. NATO declared space as a new field of operations this week, closely followed by a Turkish declaration stating the building of its own space agency. The Turkish case is significant. The US has gone from using the army as an argument in the trade war to not even keeping up appearances in its predatory behavior. This week, thanks to a BBC investigation that was picked up in newspapers and TVs all over the Middle East, it became clear that in its latest move in Syria the American price was to keep the oil with the PKK-YPG as a guardian and rentier.
Two increasingly marked tendencies
This week’s lesson is that the tendencies towards confrontation and inter-imperialist conflict are inextricably woven with the strategies to deal with the crisis of the bourgeoisie all over the world. Strategies that, also in a global way, include attacking working conditions, pensions and the health system as a way to reanimate accumulation. Today both threads are so strongly intertwined that one cannot cut one without cutting the other. And the scissors are the same, the working class.