FSE/ESF Forum social européen/European Social Forum - Against deregulation and privatisations policies in Europe
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Against deregulation and privatisations policies in Europe [en]
26 February 2004

...In favor of a broad social mobilisation against the undermining of public welfare, against privatisation and deregulation, against the current attacks on pensions and labour laws which is going on all over Europe. It could be the message to all social movements from this Social Forum. That could be an excellent starting point for a more co-ordinated counter offensive against the corporate interests which are now attacking our societies on all fronts.


By Asbjørn WAHL

A ten minutes’ contribution does not allow much in terms of analysis or theoretical development of the subject in question. Since I presume that most of you are against privatisation and deregulation, I will therefore focus on three main analytical points which I consider important if we want to develop our struggle against privatisation and deregulation.

My first point is about power, structural power and power relations in society. Public services and the welfare state as we know it in Western Europe are the results of social struggles. High quality public services are in other words a question of power - of economic, social and political power. What made the welfare state possible in the last century, was an enormous shift in the balance of power in society. Public health, national insurance schemes, social security etc. were thus introduced and improved as a result of the increasing power of organised labour. Public ownership and control of the basic infrastructure in society, of the utilities, represent an important part of these new power relations.

In this regard, it is important to notice that the strength of labour was not only reflected in labour laws and regulations. Probably more important was the general taming of market forces. The power of capital was reduced in favour of politically elected bodies. Competition was dampened through political interventions in the market. Capital control was introduced and financial capital became strictly regulated. Through a strong expansion of the public sector and the welfare state, a great part of the economy was taken out of the market altogether and made subject to political decisions. It was the organising and the struggle of the trade union and labour movement, in alliance with other popular and social movements, which created new power relations in society and gave us the welfare state and universal, high quality public services.

Capital control, in particular, made it possible for governments to pursue a policy of national and social development without continually being confronted with capital’s exit strategies where big corporations threatened to flag out, to move to other countries with more favourable conditions, if their interests were hurt.

So, in short, public services and public welfare is a question of power!

My second point is about the social pact or the class compromise. As there is no time for a comprehensive analysis, I will only focus on some key elements of this specific, historic development. During the last century, the trade union movement gradually developed a sort of peaceful cohabitation with capitalist interests. In the 1930s this cohabitation started to become institutionalised in some parts of Europe when the trade union movement stroke accords with employers’ organisations, particularly in the North, and after W.W.II in most of Western Europe. From a period characterised by hard confrontations between labour and capital, societies entered a phase of social peace, bi- and tripartite negotiations and consensus policies. This social pact between labour and capital formed the basis on which the welfare state was developed, including a strong and extensive public sector.

One important factor in the post war period was that capitalism experienced more than 20 years of stable and strong economic growth. This made it easier to share the dividend between labour, capital and public welfare.

It is important to realise that this social partnership between labour and capital was a result of the actual strength of the trade union and the labour movement. The employers and their organisations realised that they were not able to defeat the trade unions. They had to recognise them as representatives of the workers and to negotiate with them. The peaceful cohabitation between labour and capital rested in other words on a strong labour movement - a strength which was developed exactly through the many struggles and confrontations between labour and capital in the previous period, including the Russian revolution and thus the existence of another economic system in the East. As the British historian Eric Hobsbawm correctly has pointed out, this created fear among capitalists in Western Europe and made them give in to many social and economic demands from the labour movement in order to dampen its radicalism.

Now, more than 50 years later, we have to admit that the capitalists succeeded with their strategy. Due to important achievements in terms of welfare, wages and working conditions, the policy of the social pact gained massive support from the working class, and the more radical and anti-capitalist parts of the labour movement were gradually marginalised. Thus, this development led to the depolitisation and deradicalisation of the labour movement and the bureaucratisation of the trade union movement. It became the historical role of the social democratic parties to administer this policy of class compromise.

In conclusion, the policy of the social pact undermined in the long run the power basis on which the welfare state and the extensive public sector was developed!

My third point is about the neoliberal offensive. The politics of the social pact culminated in the 1970s. Then, in the aftermath of a deep international economic crisis, market forces went on the offensive and the current era of neoliberalism started. Two parallel historical processes came together and made this offensive possible. One was the economic crisis, which made capitalists and governments take action to restore profitability, the other was the depolitisation and deradicalisation of the labour movement, which opened a possibility to “solve” the crisis by attacking working conditions, trade union and workers’ rights, public services and social rights and provisions.

What we have been facing over the last twenty years, is therefore the abolition of capital control and fixed exchange rates, the deregulation and liberalisation of markets, the redistribution of wealth, the privatisation of public services, the increased use of competitive tendering and outsourcing, the downsizing of the workforce to the absolute minimum, and the consequent increasing labour intensity, and the flexibilisation of labour. In short, an immense shift in the balance of power between labour and capital has taken place, and this time in favour of capital.

Finally, I would like to draw three conclusions on the basis of these analytical points.

1) The shift from consensus to confrontation. As the power basis of the class compromise has eroded, capitalist forces have withdrawn from the social pact. In other words, bi- and tripartite negotiations do not any longer work the same way as it did during the social pact period. The social forces which want to defend public services and public welfare will therefore have to meet the confrontative attacks from the capitalist forces with a counter offensive. Whether we like it or not, reality is that we are moving from consensus to confrontation. We had rather be prepared. Great parts of the trade union movement have not yet realised this. Demands for a new class compromise, obviously with a nostalgic hope that the social peace and the gradual improvement of social conditions of the 1960s should be restored, do not have any realistic basis under the current balance of power.

2) The need for structural reforms. We have to understand power. It is not a question of good intentions, good will or high morale (or Corporate Social Responsibility, as somebody names it), but of power relations, of the balance of power between labour and capital, between market forces and civil society. In order to, in the long run, fight privatisation effectively, we will therefore have to confront the economic, political and social power structures which stand behind the attacks on public services and the welfare state. Structural reforms like a currency exchange tax, capital control, increased taxation of multinational companies, local control of natural resources, progressively increased democratic control of the economy should therefore be the starting point and the perspective of the struggle which has to come.

3) The necessity to build broad alliances. A considerable shift in the balance of power can only be achieved through a broad interest-based mobilisation of trade unions, social movements and other popular organisations and NGOs which is strong enough to confront the corporate interests and push them on the defensive. In particular, we should work hard to develop the alliance between the trade union movement and the social forum movement which has developed over the last few years. This new global justice and solidarity movement has been decisive in revitalising popular resistance and has - with its dynamic, its insistence on independence and democratic control from below, its radicalism and its militancy - given us hope and inspiration. These characteristics could contribute constructively to the revitalisation of many old-fashioned and bureaucratic trade unions, and I know a lot about that after 20 years in the trade union movement. If we are able to handle this alliance correctly, the two movements could reinforce each other and bring the struggle to a higher level.

Over the last couple of years, I have been in charge of building a broad social alliance in Norway, the so-called Campaign for the Welfare State, to fight privatisation and the undermining of the social welfare system. This alliance is mostly trade union based, but also include organisations of a number of other social groups, like small farmers, pensioners, students, women, users of social welfare services, unemployed, etc. It is not yet a real popular movement, but we have established the political, social and organisational infrastructure based on the broad alliance which is necessary if we are to stop the policy of privatisation and make another world possible.

Maybe a broad social mobilisation against the undermining of public welfare, against privatisation and deregulation, against the current attacks on pensions and labour laws which is going on all over Europe, could be the message to all social movements from this Social Forum. That could be an excellent starting point for a more co-ordinated counter offensive against the corporate interests which are now attacking our societies on all fronts.

Thank you for your attention.

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