The Long Goodbye of Social-Democracy

So we have here a situation where an ostensibly sovereign state, the UK, has been penetrated by another sovereign state, Israel which in effect is selecting who and who shall not be members of the Labour Party’s policy and decision-making processes...

The ongoing process of political degeneration which has been happening in the UK Labour Party is basically part of a deep-going movement which has been taking place in all left-of-centre parties in Europe. In political/ideological terms, they have been swept away by the rampaging neo-liberal globalist forces – circa 1980 onwards and have, like good little boys and girls, trimmed their sails to the globalist agenda. This straight betrayal has been justified by the usual TINA cliche. The roll-call of the sell-outs has included the SPD (Germany), the PS (France), Pasok/Syriza (Greece), the old ex-communist party of Italy, (now rebranded as the Democratic Party), PSOE (Spain), and not forgetting the Democratic Party in the US. This historical betrayal has given the militant right a chance to attack the very real sell-out of the centre-left parties and publications which includes the Guardian, New York Times, Economist, Washington Post, . L’Express, La Figaro, Der Spiegel – the list is extensive.

THE BRITISH LABOUR PARTY

The Guardian newspaper had long been a supporter of the Labour Party but more recently has been the trend-setter in this ‘liberal turn’ if we may call it such. There has taken place an unseemly metamorphosis from centre-left to the Blairite right. Going back to earlier days the Manchester Guardian, as it was then called, steered an honest social-democratic course under the leadership of C.P. Scott, famous for his catchphrase, ‘’Comment is free but facts are sacred.’’ This  was the ultimate statement of values for a free press and continued to under-pin the traditions of good newspapers throughout the western world, (but sadly of course this is no longer the case, not by a long shot). Looking back, Scott and the then Manchester Guardian resolutely opposed the British war against the Dutch settlers (Boers) in South Africa (1899-1902). For his pains Scott’s home was physically attacked by jingoistic mobs and he required police protection, as did the property of the Manchester Guardian which was also attacked.

That was then, this is now.

The rot in the current Guardian newspaper began with the conversion of what was once a campaigning left-of-centre political publication into a straightforward business journal with a centre-right political orientation; this happened earlier in this century when the Scott Trust was rebranded as the Scott Trust Limited, along with the Guardian Media Group – GMG – both of whom became registered as a commercial company by decamping to the tax haven of the Cayman Islands British Overseas Territory, for tax reasons – i.e. tax avoidance.

THE CORBYN AFFAIR

As for the whole ‘anti-semitic’ brouhaha surrounding ex-leader of the Party, Jeremy Corbyn, and the Labour Party itself, this was engineered from both internal and external sources. It should be understood that anyone who is anyone in the Parliamentary Labour Party (PLP) and who entertains political and occupational preferment in the PLP is a member of the ‘Labour Friends of Israel’ – this is mandatory. The same is true of the Conservative Party and the Liberal Democrats.

So we have here a situation where an ostensibly sovereign state, the UK, has been penetrated by another sovereign state, Israel which in effect is selecting who and who shall not be members of the Labour Party’s policy and decision-making processes. This blatant process was caught by a mole planted by the Kuwaiti TV Station Al Jazeera and televised under the name of ‘The Lobby’ where the mole in question interviewed a member of the London Israeli embassy – Shai Masot – about the ‘taking down’ of pro-Palestinian politicians and spreading Zionist influence inside independent political groups active in the UK. This TV interview showed Mr Masot – who was blissfully unaware of being televised – discussing with his interlocutor how to cause embarrassment to pro-Palestinian politicians deemed to be detrimental to Israeli interests.

Students and campaigners told a reporter posing as a pro-Israel activist they had been given funding and support from Israel’s embassy in London to counter the Boycott, Divestment and Sanctions (BDS) movement. When asked whether he had ever “built a group”, Mr Masot replied: “Yeah, I did several things like that, yeah…in Israel and here. Nothing I can share but yeah.’’

“It’s good to leave those organisations independent, but we help them actually.”

The UK National Union of Students said it was investigating alleged attempts to influence last year’s leadership election, which saw its first black, Muslim, female president Malia Bouattia voted in.

Corbyn, a milquetoast "socialist", did not really fight back against his cynical accusers' disinformation.

Following claims that opposing NUS members held “secret meetings” with activists supported by the Israeli embassy, a spokesperson for the union said: “The NUS takes these allegations seriously. We are looking into them and, when we have all the information available, the behaviour of NUS officers will be reviewed, and appropriate action taken.” (1)

This seemed outrageous, but such is the influence of extra-national political configurations in British politics. This was instanced in the manner in which the now ex-leader of the Labour party – Jeremy Corbyn – was subject to a relentless but bogus assault internally from the Blairites, the media and also Britain’s Jewish opponents on the basis of his ongoing support for Palestinian rights. Of course anyone who in Zionist terms is a supporter of Palestinian rights is ipso facto an anti-Semite. On absolutely no evidence Corbyn was suspended from the leadership of the party which was now under the leadership of one (Sir) Keir Starmer QC, who doesn’t seem to have any political views at all, apart from his unconditional support of Israel, which of course befits yet another political carpet bagger on the make. ‘What are my politics?’ What would you like them to be?’

Of course the same scenario also applies to the United States – a fortiori. This latter case of organized Jewish influence both internal and from outside (Israel) is so open, widespread and obvious that it barely needs mentioning. (2) Moreover, socialism in the United States, or even social-democracy, has, never, since the days of Eugene Debs been anything other than a minor curiosity and led by a leadership so venal that it collapses at the first serious challenge. Such was the fate of Bernie Sanders, who managed to capitulate to the DNC powers-that-be not once but twice.

But to return to the Labour Party, this political hollowing-out of what was once a mass and proud reformist party has by now been pretty much neutered and in keeping with centre-left conditions just about everywhere. The list does not make pretty reading. Currently there is no centre-left party, in western Europe at least, worthy of the name, the capitulation seems complete. As follows:

GREECE. THE RISE AND FALL OF SYRIZA

On its accession to power Syriza laid great emphasis on trying to convince their opponents that their proposals were financially sound and of benefit to all in the long-run. This is one of the characteristics of social-democracy. It is an approach based upon ‘the truth’, as they understood it, and rationality of their approach and compared favourably to the mistaken beliefs of their political opponents. What Syriza did not understand, however, was that the social virtues and heritage of social democratic reform was now history, buried deep under the refuse pile of new neoliberal values.

The political imperatives of SYRIZA’s position consisted of an adamantly committed policy to stay in the eurozone and the euro regime; but this was a regime of structural flaws which only benefitted the elites rather than ordinary folk. Concurrent with this the Greek people were consistently indicating in various polls taken that they did not want to leave the eurozone either. Like Syriza they wanted to end austerity and stay in Europe and keep the euro. Neither thus understood that the root of austerity lay in the neoliberal euro regime that they wanted to keep. One would have thought that following the crowd in this instance was a dereliction of duty on the part of the Syriza leadership who should have known better, but it is so much easier to take the easy way out than actually lead.

Syriza wanted a European version of the US 1930’s New Deal, but there was no FDR on the horizon, and, moreover, this was 70 years later, and history was not about to repeat itself.

The upshot of this sad historical nemesis was when Syriza took the road of least resistance. The European base of neoliberalism required the arrangement of goods and services and free movement of labour and capital which had indebted Greece (and other peripheral economies) and ensured some form of perpetual austerity. But this was precisely how the system was designed to work.

‘’Over the course of the third debt restructuring negotiations in 2015, Syriza would at first deny and then resist this reality, then concede in steps as it retreated from its positions and its Thessaloniki programme. In August 2015, it capitulated. Like its political predecessors, New Democracy in 2012, and PASOK in 2010, Syriza would also eventually settle into the ‘caretaker’ role for the neoliberal Troika.’’ (3)

FRANCE – LE PARTI SOCIALISTE – ABJECT FAILURE.

In late 2016, French President Francois Hollande became the first leader of the 5^th Republic to announce that he would not seek re-election leaving his Parti Socialiste to find another candidate for the April 2017 presidential election. The five years of Hollande’s presidency had not been kind to the ruling party. Terrorist attacks, a shift to the right on domestic matters, persistent unemployment, internal party divisions, and even an illicit love affair, eroded confidence in Hollande’s government and left the Socialists with little in their playbook that remained popular with voters.

Hollande’s choice for economy minister, Emmanuel Macron, created new problems for the president right from the start. Just 36 when he was appointed in 2014, Macron was a former investment banker at a firm owned by the Rothschild family – an unusual choice for a president who once declared that the world of finance was his “enemy”.

Fake socialist François Hollande remains one of the worst examples of vassalage to Washington in the history of Modern Europe.

Macron soon angered the Socialist’s left wing with his criticism  of the 35-hour work-week and by calling for the deregulation of the French economy. Socialist deputy Yann Galut spoke for many in his party when he accused Macron of “disowning all the values of the left”. But then what else from an investment banker did the party expect?

The pro-business reforms, known as the “Macron laws”, included allowing stores to remain open  on Sundays and late in the evenings. A more wide-ranging labour code 5, made it easier for firms to hire or fire and to extend employee working hours, soon followed suit. The proposed reforms prompted months of sometimes violent protests  over the summer from students and unions who were angry over diminished labour protections. Yes it was all straight from the neoliberal policy manual. Hollande’s government controversially pushed the bill  through parliament in June 2016 without holding a vote, igniting a new burst of outrage.

Macron was not the only member of Hollande’s cabinet to anger the party’s leftist base. Manuel Valls, 54 – the French Tony Blair – who served as interior minister and then prime minister before resigning to announce his own presidential run, has proved that even a Socialist Party can have a right wing.

As protests against labour reforms spread across France last summer, Valls once again took a hard line, moving to ban further demonstrations in Paris after sporadic outbreaks of violence. It was the first time since the 1960s that union demonstrations had been banned in France and it sparked outrage across the political spectrum, including within the already divided Socialist Party. After a weeklong stand-off, the unions were eventually allowed to hold a protest march via a different route.

Valls has said he wanted to ‘modernise’ the Socialist Party, even suggesting that it rename itself because the term “Socialist” is too “old-fashioned”. He says that a revitalised party could unite all of the country’s “progressive forces” into one movement. Valls’ brand of ‘right-wing Socialism’ (i.e., a neoliberal party) highlighted the quandary the party faced. If Hollande is seen as representing the traditional yet ineffectual left, its more dynamic members now look like the centre-right.

As unemployment continued to hit record highs, Valls infuriated many by saying more needed to be done to encourage the unemployed to get back to work. Macron, for his part, had said that the costly system of unemployment benefits needed to be revised, blaming the unions for deadlocking negotiations.

Statements such as these, coming as record numbers of French citizens struggled with a lack of job opportunities, have heightened resentment among much of the public and divided those within the Socialist party. And they seem more like admonishments that would come from the right-wing Les Républicains party than from the fresh new faces of France’s left. But after the erratic Hollande years, the party now faced the task of reinventing itself as a movement that combines traditional leftist values with a fresh dynamism that is ready to meet the challenges of the future. In short, the PS had to change into a neoliberal outfit. After all – TINA!

Humiliated, unloved, and threatened to be plundered by Macron’s movement, the French socialists stood shivering at a crossroad. Hardly unexpected of course. France was, after all, being corralled into the neoliberal sheep-pen.

France has predictably followed the universal neoliberal economic prescriptions and rewarded with the wholly expected failed outcomes. After growing at an estimated rate of 1.7% in 2018, GDP grew by an abysmal estimated 1.3% in 2019. Minimal growth rates needed to overcome this economic standstill needed to be at least 2% to make any impact on what has become a secular stagnation. This has had political ramifications.

The European elections of May 2019 saw the victory of the National Rally of Marine Le Pen (far right), gathering 23% of the vote, compared to 22% for the Republic in March of Emmanuel Macron. On the international scene, the president intends to strengthen the integration of the euro zone by revitalizing the Franco-German partnership. But Macron’s delusions of grandeur are simply swimming against the stream here with unemployment at 10%, trade figures all negative, private debt to GDP at 227% and Sovereign debt at 98%. Unquestionably France is in a deep structural political/economic crisis.

From Gaullism in 1945 consisting of independence and distrust of the Anglo-Saxon bloc, to the current force feeding of neoliberalism and an unquestioning loyalty to NATO. Mission accomplished? Not quite. And then comes the emergence of the Gilet Jaunes. What next for France?

GERMANY: THE SPD

The oldest Social Democratic Party in Europe, the Sozialdemokratische Partei Deutschlands, can be traced back to the 1860s, and for much of the 20th and 21st centuries it has represented the centre-left in German politics, although not the far left politics of the pre-war KPD (Communists) and SAP (Socialist Workers’ Party’ where Willie Brandt was once a member). Nevertheless from 1891 to 1959 the Party at least theoretically espoused Marxism. Of course this all changed in the main due to Cold War but more importantly for the need for political deals and coalition governments which were made the sine qua non for the formation of governments in Germany. At the present time, the SPD is in a fragile coalition government together with the conservative CDU/CSU and the SPD, the Grand Coalition as it is called.

THE EUROPEAN POWER-HOUSE:

In economic terms Germany had always been the economic powerhouse of Europe and possibly even the world. Its dynamism came from a globally competitive industrial base, pivoting on automobiles, chemicals, and machine tools. Its exports enabled it to command vast surpluses on current account thus providing the wherewithal to lend globally.

Whether this Teutonic pre-eminence was a conscious policy choice on the part of Germany, or merely a policy-drift due to the internal structure of Germany’s post-war policy configuration seems debatable. Germany had certainly bucked the Anglo-American trend of de-industrialisation and financialization which had become de rigueur internationally as a result of the putative ‘efficiency’ of the Anglo-American model. Germany had not deindustrialised, had a smallish stock market compared with other developed states, eschewed as far as possible a system of equity funding and maintained a traditional reliance on bank funding for industry since long term relations were easier to develop among corporations and banks and the internal structure of corporations is not driven by the desire to placate stock markets. Moreover, the German banking system had a multitiered and competitively structured organization which included a raft of smaller and medium sized banks, the Sparkassen, which operated with a local focus. This stood in stark opposition to the oligopolistic banking monoliths of the Atlantic world.

Additionally, there were further reasons why Germany emerged as the EU hegemon. Primarily, Germany did not sacrifice its world class industrial-export sector on the altar of deindustrialisation. But instead adopted and adapted its own variant of financialization while at the same time protected its industrial sector by manipulating its exchange rate to protect exports. The German manufacturing sector is highly productive, export-oriented and has maintained relatively strong union representation in the wage formation process compared to the rest of the private (domestic) sector which has modest productivity and relatively weak unions in comparison with other EU countries.

In the domestic economy, however, Germany was able to restructure (i.e., lower) wage costs and working conditions with the imposition of the Hartz reforms – a set of policies arrayed against German labour which pushed down costs through the implementation of ‘flexible’ labour markets. This gave Germany a competitive first-mover, edge in intra-European trade resulting in an ongoing surplus on its current account. And when one state achieves a (recurring) surplus on current account other states must record a deficit on current account. In this instance this was the southern periphery. If this smacked of neoliberalism –that’s because it was.

In sharp contrast to the southern periphery the eastern periphery of central Europe was not part of the eurozone which means that they were not ensnared in the Iron Cage of EMU and enabled to keep their own currencies. But heavy German investment in this area produced a core-periphery relationship where low-wage, semi-skilled assembly work was farmed out to Slovakia, Slovenia, Czech Republic, Hungary, and Poland. That is the usual pattern of FDI supply chains. High-end production, including R&D was kept at Home Base.

Additionally, Central European peripheries have come to depend heavily on Germany for technology and markets. If Germany faced a severe recession so would probably  the whole of Central Europe.

Thus, Germany was to become the overseer of an increasingly neo-liberal order precisely at the time when the 2008 blow-out was to cross the Atlantic and usher in a quasi-permanent period of instability for the whole EU project. The main actors in the future development of the EU were the ECB the EC and the IMF, the infamous Troika. The ECB in particular was the paragon of Banking, monetary and fiscal rectitude. This was underlined insofar as it was domiciled in Frankfurt as was the Bundesbank and was heavily influenced in policy terms by this particular institution.

Then came the 2020 derailment. Prior to this, however, growth rates had been zero to miniscule at less than 1% per quarter since 2018. Then came the yo-yo bounce in 2020. Ten Year Bunds Yields were at -0.53 (that’s a minus sign BTW), unemployment was beginning to rise, inflation was at -0.2% which means that it was actually deflation, interest rates were at zero, consumer confidence was at -3.1, retail sales at -2.2%, Sovereign Debt-to-GDP 68%, Private Debt-to-GDP at 154% (but these latter private figures were based upon 2018 statistics).

THE SPD VANISHING TRICK:

And where was the SPD during all this time? It was following the trend of course. The then party leader and Chancellor, Gerhard Schröder, defended his counter-reformist ‘Agenda 2010’ and praised Tony Blair’s ‘New Labour’ as a successful example of ‘modern’ social democracy. At the same time, up and down the country, some 90,000 workers responded to a call by the Trade Union Federation, the DGB, and demonstrated against attempts to dismantle the welfare state. In East Germany, 84% of all steel workers organised in the IG Metall voted in favour of industrial action for the 35-hour week which had been introduced in the West back in the 1990s.

Horrified by high unemployment (4) and fear of recession and even depression, Schroder and his think tanks were doing what they had always accused the previous Helmut Kohl government of doing: they were attacking the unemployed and not unemployment. They claimed that dismantling the welfare state and massive tax reductions were to the benefit of the employers and the rich but in general would open the path towards economic growth and a new jobs miracle. In doing this, they could count on the applause of the bourgeois media and politicians who kept pushing them further and further down that road.

But later developments in 2019 have led to a new inward turn of the SPD which will give the already rapidly changing party system a further push. Both the CDU and SPD have lost dramatically during recent European and regional elections. The winners have been the ‘woke’ Green party and the far-right Alternative fur Deutschland (AfD). The Green party, also led by a new team since January 2018, has been a clear beneficiary of the rise of the urban middle-class and the weakness of the two governing parties. The Green party is now solidly number two in the party system and highly likely to join the next government, either with the CDU or the two parties on the ‘left’, the SPD left centrist and Der Linke the old East German Communist Party.

CONCLUSION

Throughout Europe the Social-Democratic tradition has been in crisis since the 1980s onwards and is heading rapidly toward marginalization and oblivion. Having prostrated itself before the deities of neo-liberalism and globalization, and swallowed the holy dogmas whole there seems no way back. And if anything the situation in the southern and eastern peripheries are even more dire than those in Western Europe. The political structures in Europe now range from outright fascist, right and centre right, and an allegedly centre-left that acts like a centre-right, a Guardian-style liberal woke party. That’s it folks. Europe seems to be heading to a turbulent and ugly future

NOTES

(1) The Lobby – Al Jazeera – The Independent newspaper – London 12-January-2017

(2) The Israel Lobby – John J Mearsheimer and Stephen Walt – passim.

(3) Looting Greece: A New Financial Imperialism Emerges – Jack Rasmus – passim.

(4) The story of the German jobs miracle is misleading. It is true that the number of people in employment increased by more than 10 percent between 2003 and the end of 2016 from 39 to 43 million. But this was achieved mainly by replacing full-time jobs by part-time and mini jobs. In fact, actual working time did not increase at all up to 2010; the work was just spread over more people.” And also since the economic climate improved in 2011, the volume of work has been growing much more slowly than employment and is still below the levels of the early 1990s. And that is why in 2016, 4.8 million people in Germany were living entirely from mini jobs. A further 1.5 million are working against their will in part-time jobs. And then there are around 1 million contract workers and more than 2 million self-employed without employees, and most of them do not have enough work.

The “industrial reserve army“ of the unemployed, as Karl Marx once called them, “was reduced in size at the price of a growth in the reserve army of the under-employed in part-time work and the over-employed who have to do several jobs to get by.”