When conservative Western commentators want to expose some "Third-World regime" involved in a conflict with one of the more powerful capitalist countries such as the United States, Britain or France, very often they use a journalistic device, that of the unelected interfering villain. According to this device, these "evil, backward countries" are in a far worse state than the more "civilised" Germany, Belgium or Canada, because there is either an unelected ayatollah in Iran, an unelected general in Myanmar, an unelected Dear Leader in North Korea, who can deliver a speech in a Teheran mosque, a Rangoon military school, a Pyongyang Party headquarters and decisively influence the course of national politics.
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| Jean-Claude Trichet, president of the European Central Bank |
The implication is that so-called "civil society" in these countries is so backward, barbaric and democratically "illiterate" that it easily falls prey to the influence of these "bully boys", while in the "strong, democratic civil societies" in countries like Spain, Sweden or Australia, democracy freely unfolds and rejects any interference from without.
And yet, after a closer examination of these countries, the differences between them and Iran, Burma or North Korea seem to blur somewhat when we read news items like the one we read on March 13 about how the European Central Bank operates. We do not find rational, scientific explanations but something more akin to religious mysticism. It may be couched in more subtle terms, but it is nonetheless an attempt to confuse the people of Europe.
We will not disturb the Roman Catholic high priests - Mr Ratzinger and his cardinals - in important imperialist, albeit pious, countries such as Italy or Spain. We won't mention the feudal nonsense of parasitic monarchs and aristocrats in important imperialist countries such as the Kingdom of Holland, the Japanese Empire, the Kingdom of Spain, and of course the granny of all non-republics, the United Kingdom of Great Britain and Northern Ireland. We won't even delve into the undemocratic power concentrated in the hands of the military elite and the almighty secret services in Washington D.C., London and in general in all the imperialist capitals on the planet.
Central banks' autocratic rule
No, we will simply concentrate on the latest monthly bulletin issued by the ECB, the European Central Bank. This financial institution is headed by an individual called Jean-Claude Trichet. Its statutes are based on the concept of "financial and political independence", which implies a very limited accountability to the national governments and the European Parliament, let alone the average worker living within the Eurozone. Trichet is therefore the high priest (or dare we say the Ayatollah?) of the Euro, the only interpreter of its impersonal will. Similar individuals of his kind hold positions in the other important central banks of the West. The wars waged by the Federal Reserve against the workers in America and abroad are led by Mr Ben S. Bernanke, the generalissimo of the Dollar. The Pound is paternally looked after by the Dear Leader of the Bank of England, Mr Mervyn King. Also the Yen used to have its shogun, the Governor of the Bank of Japan: he was Mr Toshihiko Fukui until March 19th but the position is currently vacant, for the first time since World War II.
So, what have Trichet's men enlightened us with? The part of the bulletin that received more attention in the press was that section that dealt with inflation. The economic crisis we are entering on a global scale was not explicitly mentioned, probably out of superstition, but its spectre was clearly present on every page when they drew up the report.
These people are clearly followers of Professor Dan Ariely, a "behavioural economics" guru at the Massachusetts Institute of Technology (MIT), who recently appeared on a CNN programme to explain his theory about the taboo "R-word": we should not talk about recession - he explained - because mentioning it makes it happen, "like sex: you talk too much about it and you get aroused" (sic).
The ECB report provides some data on what caused the recent rise in inflation levels within the Eurozone. No surprise then that they tell us that it is mainly due to rises in food and energy prices, i.e. the most basic commodities that affect workers' living standards.
Rising prices at the source - in the oil, gas and food-exporting underdeveloped countries - are usually blamed, but they conveniently forget to mention that the reasons behind the steep rise in oil and gas prices has much to do with the war-mongering of the imperialist powers. On top of this, food prices are being pushed upwards by the attempt of OECD countries to replace, at least partially, fossil fuel with bio-fuel, which causes shortages of basic agricultural produce which could be used to feed hungry human beings.
But that is not the whole story. It seems that a lot of speculation by the food-processing industry is also going on. In Venezuela, for obvious political motives, this kind of speculation is going on on a massive scale. That explains why Hugo Chávez has announced that his government will nationalise some meat-processing factories as a response to vicious capitalist sabotage through food-price speculation. This measure is totally justified and merits support and its actual implementation needs to be monitored, but what we can be sure is not going to happen is that any of the European governments will do the same. They will simply let the prices go up, leaving the workers with no option but to take strike action to keep up their wages with galloping prices.
The high priests of the Euro, like all preachers of all Churches, create a problem and then they proclaim any possible solution to that problem to be a sin; you simply have to bow your head and bear the burden. In fact, complaining or protesting is declared a sin. If you want to be accepted as a true believer but you happen to be hungry because your wages are too low, coming out onto the streets to protest, or worse still joining a union or becoming a socialist, is considered anathema, old-fashioned, or as a high priest would say "a sin"! You are supposed to humbly accept your lot, stay hungry and keep your mouth shut. Thus we see how the capitalists increase the prices of all basic foodstuffs but the economists on their payroll forbid you from asking for an automatic adjustment of your wage. All very nice indeed!
Inflation - a clever form of theft
The workers can easily see that inflation is a clever form of theft. Let's say they have signed a labour contract, a piece of paper, accepting that their wages will be $1000 a month for their labour, which allows them to buy a certain amount of commodities. Then they realise that they are earning the equivalent of a much smaller quantity of commodities - still $1000 a month on paper, but the same money has less value now. Reacting against this legalised robbery, the sinful working class is easily tempted to demand the indexation of wages, i.e. the introduction of a sliding scale system, whereby every month or every few months, every worker is entitled to receive an automatic wage increase so as to compensate for the rate of inflation.
However, precisely as with their religious counterparts, our Euro high priests inform us that what apparently seems to be the solution would bring forth awful consequences in the long run. And just so as to make it a little more threatening, the consequences of these economic sins are usually to be paid for in this life and not in the afterlife.
Rising "consumer inflation perception"?
Notice how elegantly hypocritical is the language used in the edicts of these ECB theologians. According to Forbes:
"There are worries about wage pressures in 2008, because of rising consumer inflation perceptions and growing public concern about purchasing power."
They cannot even bring themselves to admitting openly that prices have actually risen quite steeply while real wages have stagnated! According to this mystical thinking it is not that inflation has risen; no, it is all due to "consumer inflation perception"! We enter here a fantasy world where truth becomes fiction and fiction truth! Is it really that the consumers perceive prices rises, or is it an actual real process? We can be sure that the sellers have no such illusions. They seriously want us to believe that real purchasing power has not fallen that much, even though their very own statistics tell quite a different story. So it is only "public concern about purchasing power" that is giving inflation such a bad name! But if it really were all about perceptions and concerns, and not real processes, why are they so concerned by what are merely "perceptions"? Did they issue their latest bulletin simply to counter large-scale collective economic hallucination?
In spite of all these magic words, aimed at spiriting away the problem, our gurus at the ECB are getting more and more concerned. But are they concerned about the conditions of the European workers? Are they worried because a new generation of workers is living well below the level their parents could enjoy in the past? Are they worried because working class people, in what is supposed to be one of the most advanced regions of the planet, are finding it very difficult to make ends meet? Are they worried about the growing levels of unemployment, casualisation of labour, uncertainty about the future, stress and personal breakdowns experienced by both blue and white collar workers all over Europe?
Absolutely not! In fact their concerns are quite the opposite. What is worrying them are "wage pressures", i.e. the possibility that wages may go up. To say that you are worried about rising wages is just a polite way of saying that you want wages to go down. These people at the top of the pyramid do not seem to have the same priorities as most people that live in Europe.
In fact, they have some good advice for us. According to them, we the workers should not try to adjust our wages to match inflation, because otherwise they, the capitalists, will adjust prices to match rising wages. We could ask the question: instead of stopping us from adjusting our wages, why do you not stop adjusting the prices? We can anticipate their reply: this is the way the free market operates. As with high priests, the capitalists can do whatever they like while those below them, the workers, have to follow strict rules dictated by some well-paid advisors. We are thus "free" to buy expensive commodities in the marketplace, but we are not free to sell our labour power at a higher price!
A sliding scale of wages...
The idea of a sliding scale of wages in response to constant increases in prices was developed long ago by the labour movement. Trotsky explained in the Transitional Programme written in 1938 that:
"Neither monetary inflation nor stabilization can serve as slogans for the proletariat [...] Against a bounding rise in prices, [...] one can fight only under the slogan of a sliding scale of wages. This means that collective agreements should assure an automatic rise in wages in relation to the increase in price of consumer goods."
The bourgeois always object to the idea of wage indexation by arguing that it impacts negatively on the rate of inflation. But this is a fallacy. Wage indexation is always taken up by the labour movement in response to inflation. It is never the cause of inflation.
For example, in Italy in the 1980s there was an important conflict between the bourgeoisie (also backed by the Socialist Party in government) and the labour movement (led by the Communist Party and the main trade union federation, the CGIL) on the issue of the sliding scale of wages, the famous scala mobile. In a period of an ebb in the class struggle (compared to the 1970s) they managed to force the workers into accepting the de facto abolition of the sliding scale of wages. The main argument they used - as always - was that a sliding scale boosts inflation. However, the truth is always concrete. Even serious studies by bourgeois economists had to admit that the Italian sliding scale of wages was only responsible for less than a quarter of the strong inflationary pressure in the 1980s. Inflation continued to be higher than wage increases. Today they still have not eliminated inflation; in fact it has started to go up again. The result of all this has been that the purchasing power of wages has dramatically fallen over the past twenty years. So what is causing inflation now, if real wages have been dramatically cut? It is clearly not wages that provoke inflation. The problem lies elsewhere, but as with all taboos these words must not be uttered for fear of revealing the truth.
...And a sliding scale of working hours
Another myth they would like us all to believe in is that unemployment is a thing of the past. But that too is beginning to rise. Trotsky raised the idea of a sliding scale of working hours. If there is less work to go round, reduce the working week so as to allow everyone to have a job. This is a demand which will once more be relevant to today's situation. European countries will soon have growing levels of unemployment if the present slowdown turns into a fully fledged recession. Trotsky wrote:
"Against unemployment, [...] the time is ripe to advance along with the slogan of public works, the slogan of a sliding scale of working hours. [...] On this basis all the work on hand would then be divided among all existing workers in accordance with how the extent of the working week is defined. The average wage of every worker remains the same as it was under the old working week. Wages, under a strictly guaranteed minimum, would follow the movement of prices."
Is that not a reasonable demand? Not if you live in the ECB temple. These high priests tell us that this cannot be. But what is the reason why these rational measures are such taboos under capitalism? The explanation is that it is always the real producers of wealth, the working class, that must pay for the deficiencies of the capitalist system. What they will not say in their edicts is the basic truth that if the bosses are not allowed to unload the weight of the economic crisis onto the shoulders of the workers through cuts in their purchasing power (inflation) or dumping some of them when things get bad (unemployment), it is their rate of profit that will be affected.
That is why what seems reasonable to workers is unreasonable to the capitalists. As Trotsky put it:
"Property owners and their lawyers will prove the ‘unrealizability' of these demands. Smaller, especially ruined capitalists, in addition will refer to their account ledgers. [...] If capitalism is incapable of satisfying the demands inevitably arising from the calamities generated by itself, then let it perish. ‘Realizability' or ‘unrealizability' is in the given instance a question of the relationship of forces, which can be decided only by the struggle."
We raise these demands because they are the only rational solution to the problems of the working class. This may sadden the capitalist high priests, it may make them despair at the sinfulness of the ignorant masses, but the truth always comes forth in the end. If the system these people defend cannot work without sacking and impoverishing workers, then it is the system that is at fault. No amount of mysticism in the language of the EU officials and ECB gurus can cover this up.
The USA has already gone into recession and the rest of the world is not far behind. None of these preachers of austerity can exorcise the fact that the workers will see through all the fog, all the mumbo-jumbo. That is what really concerns them. It is like the Catholic Church in the Middle Ages that insisted the Bible should only be available in Latin, so that the priests could interpret it for the "ignorant masses".
Capitalists are preparing for recession
From the point of view of the capitalists, it all comes down to one thing: how to preserve the rate of profit. That is the real concern of the ECB. They do not really care about anything else and the true meaning of their statement against improvement in the workers' conditions is the following: they want the recession to be paid for by the workers and not the bosses.
To make their point even clearer, they explained that it is not only about automatic wage increases, but also about negotiated wage increases: the workers should just stop asking for more money and accept their miserable fate! This is the typical advice you get from a priest... accept your lot! Here is how they put it in the ECB bulletin:
"In addition, in the current situation wage developments in the public sector need to be carefully monitored, not least as they may have some influence on wage claims in the private sector."
The argument they usually utilise as a justification for their opposition to any improvement in public-sector wages is that the burden on the state budget would be unbearable. As the Marxists have often explained, what is at stake here is not just the state budget, and their statement confirms our analysis. Private capitalists are worried because of the effect that public-sector wages have on their own employees. This is because wage increases are obviously contagious, notwithstanding the constant attempts by politicians and newspapers to divide the class playing the private-sector workers off against their allegedly "privileged" brothers and sisters employed by the state.
Workers should be prepared too!
If we listened to the ECB high priests we could be forgiven for thinking that left-wing parties and trade unions in Europe are currently launching a serious campaign to introduce the sliding scale of wages or to demand big increases in public-sector wages! But that is not the case at all. On the contrary, most European trade union leaders have seen the light and have become ECB believers. So why are they paying so much attention to the question of wage increases?
The answer is a simple one: they know that tomorrow, once the economic crisis hits home, the workers will try again and again to fight back, and ideas like the ones raised by Trotsky in the Transitional Programme will be embossed on their banners.
Their words reveal that they are preparing for the big struggles to come. The speeches delivered by their high priests are like the blessing given by the Pope to the Crusaders, an ideological condiment for the class war. They are preparing. We must be ready too! And the best way to do this is to provide a rational, scientific analysis of the processes taking place in the economy and in politics, a Marxist perspective.
The high priests of Capital will be exposed for what they really are, and the workers will once again look for ideas that can give a real answer to the problems that afflict them. Once again they will turn to genuine socialism and Marxism!