Clutching at Keynesian straws to save welfare capitalism

The forthcoming dissolution of the German parliament to allow for early elections shows the deep crisis of German capital and the political elite. A coming together of the usually very fragmented left under Oscar Lafontaine opens up new possibilities. But the left is in political crisis too: in response to global capitalism it is marked by a rejection of international socialism and the advocacy of national Keynesianism. Tina Becker reports

He jumped before he was pushed. German chancellor Gerhard Schröder surprised many political commentators when he announced last week that he would bring forward the parliamentary elections due next year - in order to quell the growing revolt in the ranks of his governing Social Democratic Party (SPD), as well as work towards the establishment of a so-called 'grand coalition' with the conservative Christian Democratic Union in a newly elected parliament. Officially, Schröder claimed he was responding to the disastrous result for the SPD in the May 22 elections in Germany's largest federal state of North Rhine-Westphalia, which for 39 years had been the safest of SPD strongholds. This was the ninth regional parliament (out of 16) in a row that has been lost to the opposition CDU since Schröder took office in 1998. Schröder had taken on what the CDU's Helmut Kohl never dared to attempt: the task of making German capital internationally competitive once again. In times of increasingly unfettered global capitalism, the 'old-fashioned' welfare state represented a massive stumbling block. The SPD government's much-despised 'reform' package, Agenda 2010, was supposed to increase Germany's productivity by introducing a range of neoliberal measures, while at the same time securing employment for half of the 3.8 million people in Germany who were without a job in 1998. This was clearly an impossible task that was bound to fail. The government's draconian measures against Germany's unemployed, a radical restructuring of the pensions system, de facto privatisation of the health service and unprecedented tax cuts for businesses have not had the desired effect of putting the 'German invalid' back onto its feet: it has not improved the country's overall economic situation and, with an estimated growth rate of 0.5% for 2005, it is still at the bottom end of the European league table, which is led by Ireland with an expected growth rate of 4.3%. Today, there are 4.9 million unemployed. The figure peaked in February 2005, when over 5.2 millions (or 12.6% of the workforce) were without a job - the highest number since World War II. Particularly in the former east of Germany the situation looks bleak: 18.9% there were unemployed in May 2005. The only jobs "evidently created" by the reforms are those "administering the introduction of the reforms", writes the Welt am Sonntag (May 29). Left coup in the SPD Over the last 10 years, the SPD has lost more than 300,000 members - the rate of departure has increased dramatically since the launch of Agenda 2010. In this situation, the normally rather diffuse internal left has attempted to come together in order to increase its relative weight. This process has been driven in no small part by the mass demonstrations against the government's attacks on the working class, which peaked in the autumn of 2004. Ex-members of the 'loony left' like the former leader of the SPD's youth section, Andrea Nahles, have suddenly become almost mainstream figures, as the SPD left begins to exert more influence. When party leader Franz Müntefering launched his widely reported "capitalism critique" a few weeks ago, it was directed first and foremost at his own, increasingly rebellious, 'comrades'. He castigated "the power of capital", which was enforcing "internationally accelerated strategies to maximise profit" and attacked hedge fund investors, who "descend onto a company like swarms of locusts, grazing on it until everything is gone before moving on". Not surprisingly, this backfired quite badly. The discrepancy between those words and government attempts to introduce a more naked, unbridled form of capitalism was all too obvious. Instead of reassuring the membership that the SPD was still more old social welfare than New Labour, the critique further encouraged the opposition. A "surprise coup" was to be launched the day after last week's regional election by a number of heads of regional party structures, as well as a dozen or so MPs, reports Der Spiegel: a joint letter was drafted, which was signed by many prominent and leading members, demanding a "new start" and a "clear signal in favour of a new direction in economic and social policies" (May 30). Though the letter was not officially published because of Schröder's surprise election announcement, opposition forces have now declared that they will vote against a number of the government's forthcoming proposals in the Bundestag, including a new bill to further reduce corporation tax and scrap one company tax altogether. "It is very questionable whether we would have been able to keep the party together for the next 14 months," admits Müntefering. A string of disastrous election results, the increasing pressure of the left and, above all, the government's predictable failure to do away with the welfare state in a 'socially responsible' way, have all played their part in Schröder's decision to hold fresh elections. Add to that the absolute majority of the right in Germany's second chamber, the Bundesrat, and it is obvious that parliament is stuck in a stand-off situation, which makes it pretty much impossible for Schröder to carry on governing in the old way. But finding a way out is easier said than done and legal experts all over the country are trying to work out the complicated details of bringing the poll forward. In Germany, parliamentary elections take place strictly every four years and the Grundgesetz of 1949 does not allow for the dissolution of parliament: the idea was to bureaucratically avoid a repeat of the instability of the Weimar republic (1918-33), when, according to bourgeois pundits, frequent changes of government opened the way for Adolf Hitler. As elections are not due until the autumn of 2006, Schröder will have to arrange for parliament to pass a vote of no confidence in his own government - the only way to dissolve parliament before the end of its term. As he still commands a simple majority in the Bundestag, SPD members will have to cooperate in this suicide - an admission of defeat if ever there was one by a government in deep crisis. The conservative opposition under Angela Merkel looks set to win the subsequent elections, pencilled in for September 20: the CDU currently stands at a massive 47% in the polls, with the SPD trailing behind at 29%. The CDU does not propose a qualitatively different programme to that of the SPD. It too wants to more or less speedily 'reform' the country - and it too does not dare simply do away with the welfare state in one fell swoop. While chancellor Schröder looks sure to make way for Frau Merkel as head of government, the role his party will play is still not yet clear. In the hope that the CDU will not receive an absolute majority, SPD leaders are calling for the setting up of a 'grand coalition' of the two main parties after the elections - clearly a temporary and unstable measure, but the SPD's only hope of not returning to the opposition benches. SPD leaders fear that, once the party is back in opposition, the left would be in a very good position to take over control - and make the party 'unelectable' for years. "This could be Schröder's last service to his party," Der Spiegel comments. "Through early elections, he might have prevented the SPD retreating to its past." The journal shudders at the thought of "comrades sitting in pubs, singing the old songs about class struggle". The German SPD has undoubtedly a more radical past than Britain's Labour Party and had far deeper roots in the working class. It traces its beginning to the foundation of Ferdinand Lassalle's Allgemeinen Deutschen Arbeiterverein in 1863 and the 1869 launch of the Sozialdemokratische Arbeiterpartei Deutschlands (SDAP), led by August Bebel and Karl Liebknecht. At the 'unity congress' of both organisations in 1875 in Gotha, the party adopted a rather cobbled together programme that reflected both its Lassallean and Marxist heritage. But at its 1891 congress in Erfurt, the newly renamed SPD got rid of Lassalleanism and turned programatically to Marx and Engels, adopting in its theoretical section many Marxist concepts and phrases. Until 1959, with the adoption of the Bad Godesberger programme, the SPD was with its Erfurt programme formally a Marxist party (the emphasis is on 'formally'). Many on the left broke with the party during World War I. Even before then, SPD tops, especially in the trade union bureaucracy, had been attempting to shed the political baggage that made it appear dangerous to the middle classes and in the last analysis capital. SPD membership peaked at 1.2 million in 1923, though that figure does not reflect the real hold the party has had: There were thousands of SPD-organised pubs, sports clubs and festivals. Especially before 1900, the trade unions were almost everywhere synonymous with the SPD. Lafontaine to the rescue? The leaders of the big unions are still sticking with the government, quoting the danger of a CDU government. But below, trouble is brewing - just like in the SPD itself. The first signs of this became apparent when a number of middle-ranking union officers, from the IG Metall union in particular, helped set up a new party -Arbeit und Soziale Gerechtigkeit (ASG) - in January 2005, following the mass protests against Agenda 2010 in the autumn of 2004. And now, two days after the election in North Rhine-Westphalia, former SPD leader Oscar Lafontaine finally announced his resignation from the party, citing the "social hardship" that the reform package has brought to many people. Lafontaine, Schröder's first finance minister, chose the populist rag Bild-Zeitung to announce his plans for a new Linkspartei (left party): he basically envisages a merger of the ASG and the Party of Democratic Socialism (PDS), the former East German ruling party. According to some polls, such a new party could expect around 18% of the vote. Although that seems a little unrealistic, it is quite clear that there is a massive and growing vacuum to the left of the governing SPD. As coalition junior partner, the once relatively leftwing Greens have fronted many of the government's most unpopular policies. They have dramatically lost support and some commentators believe that they might not even make it back into parliament at the next election. With official membership standing at 60,000, the PDS has shrunk by almost half since its foundation in 1991 and has not managed to make an impact in the west of the country. In last week's regional election, it managed only 0.9% of the vote. The 6,000-strong ASG received 2.2% - hardly a triumph. However, the PDS still gets up to 20% in many eastern regions and the AGS would clearly, given the present differences in membership levels, be the junior partner in any coalition. But it is extremely unlikely that the ASG would be able on its own to clear the 5% hurdle needed to qualify for proportional representation seats in the Bundestag. At the last election in 2002, the PDS too failed to reach 5% and was represented only by two directly elected members of parliament. Clearly, a joint campaign would make sense for both parties. Lafontaine refuses to join either of the two organisations, both of which have been more than keen to bring him into their ranks - such a widely respected and charismatic figure would bring much needed credibility to both organisations. The fact that Lafontaine has declared many times that he has no interest in Marxism has hardly been a barrier to these two reformist organisations. It is rather pathetic that it takes an establishment politician like Lafontaine to bring the two parties together to discuss unity - especially as there is no political difference to speak of between them. Both are broadly on the left, yet clearly reject socialism and communism and have committed themselves to Germany's "social market economy". The PDS has more than proved its reformist credentials by sharing power with the SDP in a number of federal states in the east of Germany, particularly in Berlin, where draconian cuts in social services have been imposed and public sector workers' wage agreements revoked. Unity from above The PDS record in office does not seem to have bothered the ASG leadership too much - it is the more radical base of the party that has expressed its anger over this, together with the rather dodgy past of many of its members who are former East German bureaucrats. Opposition or even a rebellion could be on the cards from many in the ASG base, including amongst the good number of members who actually come from a PDS background. The most prominent amongst these is ASG executive member Joachim Bischoff, who told the Weekly Worker that he left the PDS because it "made clear that it will carry out the rotten attacks on the unemployed" contained in the Agenda 2010 package: "A truly socialist party must refuse to do this and, if necessary, leave any government that attempts to force it to carry out such attacks" (Weekly Worker November 25 2004). Similarly, while the PDS leadership might realise that joining forces with the ASG is its only hope of a breakthrough in western Germany, there are undoubtedly many members who will feel uneasy about any joint campaign or even a merger. There is a definite feeling that the PDS is the more radical of the two - after all, it carries the word 'socialism' in its name and, although the fight to replace capitalism has been deleted from the party's programme, many members still see themselves as being firmly in the communist camp. The party is also much bigger, is far more rooted in the East German working class (for obvious reasons!) and many of its members expect that the ASG would simply become the western wing of the party. After a couple of hurriedly organised leadership meetings, the task of working out how to stand joint candidates has now been handed over to legal experts: German law does not allow for the straightforward fusion of two existing parties. A third party would have to be formed from scratch, which would need to collect 200 signatures in each of the 299 constituencies - plus 2,000 in each of the 16 federal states. Time is very short, but the two leaderships are now set on dissolving their respective parties into a new formation. The name, Demokratische Linke (Democratic Left), seems to be favoured by both sets of leaders and elements at the top of the ASG are referring to the new organisation as the "Olive Tree in Germany". When the proposals for the new party are finalised, they will be put to the membership of both organisations for ratification While lawyers are haggling over the details, negotiations over programmatic differences do not seem to matter too much. And currently neither of the two parties seems to be planning to involve their members in any political decision-making beyond a simple 'yes' or 'no'. Both are extremely top-heavy with a considerable democratic deficit: the PDS leadership has repeatedly - and so far unsuccessfully - tried to ban factions, while the ASG also wants to outlaw factions and prevent so-called "double membership" right from the start. For example, the ASG executive has rejected membership applications from 13 comrades from the SAV - the Committee for a Worker' International's German section - despite the fact that they had been heavily involved in the setting up of the party. Similarly, Leo Mayer, a leading member of the 'official' German Communist Party (DKP), was refused credentials to the ASG's first conference on May 6-8, although he had been elected a delegate in Munich. The reason: "He has misled many party members by focussing his speech mainly on the fact that he is chief shop steward at Siemens in Munich, referring to his DKP membership only as an aside" (Junge Welt May 4). In fact, Mayer is a well-known figure on the German left - the moves against him and the SAV comrades clearly stink of an anti-left witch-hunt. At the conference, the leadership was unable to enforce an immediate ban on double membership, though it successfully insisted on a provision that "all ASG elected representatives and functionaries will appear in public only as ASG representatives". One presumes this rule will only be applied to leftwing troublemakers and not, for example, to party secretary Klaus Ernst, who is the leader of the IG Metall union in the region of Fürth. The issue will have to be "finally clarified" by December 31 2005. However, by exactly whom this will be decided is unclear. Quite feasibly, the party executive might simply rule on the issue in one of its secret sessions: all executive members have apparently accepted the ban on reporting its meetings - including Christine Buchholz, a member of the SWP's small German section, Linksruck (which, of course, she will now no longer be able to represent in public). She refused to tell SAV comrades which executive members voted for their exclusion (for a rather heated exchange between the two groups see the SAV's website, www.sozialismus.info). In its report on the conference, Linksruck's newspaper does not even mention the witch-hunt, which has been covered by most bourgeois papers. It contains nothing more than a selection of quotes from delegates (Linksruck May 11). It seems Linksruck has - so far - been spared in the anti-left cull, mainly because the comrades have uncritically accepted many of the leadership's anti-democratic shenanigans and are keen defenders of a non-socialist AGS: it "would become superfluous if it gave itself a socialist programme, because it would exclude many of the people who could be won to the ASG," declares comrade Buchholz in her article, 'Challenges for the ASG in 2005' (www.sozialismus-von-unten.de/lr/artikel_1363.html). Can the welfare state be saved? The comrades have obviously learnt their lessons from the SWP's opportunist engagement with Respect: 'We are socialists, but we believe that socialism does not look attractive to most people. Newly politicised people do not want to hear about radical solutions to big questions. All they want to do is to save the welfare state. Therefore, we socialists propose to settle for a reformist programme' (that clearly does not even come close to being able to either save the welfare state, or solve any of today's social and political problems). Don't ask me how this is going to make socialism more attractive to anybody. Of course, the SWP and its sectarian clones around the world are not alone in their profound lack of confidence in their socialist programme: neither the PDS nor the ASG want to go further than saving the German welfare state - the PDS has moved to this position over a number of years; the ASG takes it as its starting point. That begs the very important question: in a system of global capitalism, can the welfare state be saved in a given country? In short, no - not on a permanent basis in any case. By definition, this would require purely national solutions to give a particular section of the global working class an advantage over workers in other countries. But, while capital is still based nationally (benefiting from and often being dependent on national protectionist measures and subsidies), it is clearly operating on a global level. Companies can export production overseas, exploiting the lower costs in neighbouring countries - for Germany this means, for example, Poland, the Czech Republic or even the former USSR. Despite recent attacks on workers in Germany, their wages are still amongst the highest in the world, while the state has subsidised the health and social services on a massive scale. The class compromise established in 1945 is clearly coming to an end. Since the collapse of the Soviet Union there really has been no need for capital to continue buying off the working class. During the height of the cold war though, West Germany was an extremely important country - ideologically and strategically. Sited geographically on the front line of the cold war, the country was rapidly rebuilt and then used as a beacon to display the advantages offered by capitalism. The disastrous experience of the treaty of Versailles had shown clearly what happens when a country with a strong working class movement is bled dry. After the end of World War II, a conscious decision was made to transform West Germany into a country with high living standards, a country where there was no need for revolution. A Keynesian model was introduced and the market continually overridden through state intervention. The newly established industrial unions were able to negotiate real annual wage increases, often over 10%. Of course, the traditionally strong working class movement played its part in fighting for this space - but today's struggles show that in times of capitalist economic stagnation, even the biggest trade union is, quite simply, powerless. The once mighty IG Metall still has 2.5 million members on its books. The newly fused Verdi union, which organises public sector workers, employees in the media and all bank, sales and postal workers, is now the biggest genuine union in the world, with just under three million members (I am not counting those set up and controlled by the state). Nevertheless, both unions have been unable to prevent mass layoffs, closures or so-called 'outsourcing' to cheaper countries - the best they can do is attempt to manage defeat. "What can we do?" asks a union employee who has been working for Verdi and its forerunners for the last 18 years. "Force our members to go on strike against their will? Most of them are too scared to take action - there is now at least one person in every family who is unemployed and who has to survive on just over £200 a month. There is no militancy left and I can't blame them." The inbuilt limitations of trade unionism are becoming painfully apparent. The unions represent a tremendous gain for the working class, drawing millions of workers into collective activity against employers. But in and of themselves trade union consciousness is characterised by sectionalism and the attempt to improve the lot of workers within capitalism. But going beyond capitalism is exactly what is needed today. A strategy with the aim of liberating our class on a global scale. There are no national solutions. The welfare state cannot be rescued. Of course that does not mean that we should not fight against the attacks on us orchestrated by the state on behalf of capital. Naturally, we fight against the cuts in our living standards. Of course we continue to demand better wages. Our struggles must be part and parcel of a global strategy of uniting the working class on a clear socialist programme - without such an aim, all our attempts at resistance are ultimately bound to end in failure. Concretely, a Communist Party of the European Union would be a significant step in the right direction. The AGS and the PDS are here clearly part of the problem we need to overcome. As there is no real Communist Party in Germany (or anywhere else, for that matter), we argue that socialists and communists in Germany should become critical members of the ASG, the PDS and the new formation they might set up - and fight for democratic centralist structures and a programme that goes beyond the clearly futile attempt to save the welfare state. We need a Marxist programme that goes beyond capitalism.