Insights and book reviews from across Europe on contemporary themes for Trade Unions and Workers
The ERIS Quarterly Review has been started to provide Trade Unionists and working people with accessible information that will help them make sense of the pressures and opportunities working people face in Europe.
ERIS recognises the dangers and challenges of populism, nationalism, austerity and the exploitation of wage, health and safety and working peoples terms and conditions for working people and the dangerous anti-democratic movements and ideologies that underpin and finance populist propaganda. Labour Movements have been the bastion of tolerant, progressive, open democracies in the world and ERIS will use this review, its meetings, research, information exchanges and other activities to continue to pursue European wide labour movement collaboration.
The contributions have been reviewed by the editors and may be subject to very minor editorial alterations, but are largely the views of the contributor. Contributors are drawn from across Europe and will have given talks or supported ERIS meetings, events and research. ERIS is not endorsing any individual article. The editorial Board will oversee the general content, direction and source of contributions.
Editorial Board
Tim Brooks (NEU), Bryan Hulley (GMB), Rob Martin (GMB), Bob Lanning (Unite), Janet Wall (Unite)
Editors
John Merritt and Basil Bye
A Guide to the Neo-Liberal Think-Tanks Running the World
Research paper February 2018 by Lewis Bye-Brooks
What is a think-tank?
A think-tank is an institute or a group organised to study a particular subject and provide information, ideas and advice on this particular issue. This article will focus on the numerous neo-liberal think tanks and their influence on governments.
Defining neoliberalism:
Neo-liberalism, which George Monbiot describes best as a ‘self-serving racket’, refers to the small-state economic ideology of low tax, privatisation and deregulation of the market. Neoliberals are firm believers in the free market and it’s ‘invisible hand’ which promotes the general benefit of society. Monbiot adds that neo-liberalism ‘exempts billionaires and large corporations from the constraints of democracy, from paying their taxes, from not polluting, from having to pay fair wages, from not exploiting their workers’. Neo-liberalism is both anti-worker and anti-trade unionism.
Neo-liberalism stems from mid-20th Century Europe and America. It’s founding thinkers are Friedrich Hayek, Milton Friedman and the early writings of Ayn Rand. This form of political economic thinking was developed by the Chicago school economists in the 1960’s and 1970’s. Neo-liberal theory was first applied with the US-backed coup by General Pinochet which overthrew the democratically elected socialist government of Salvador Allende. It is worth noting here that electoral democracy is not a defining feature of neo-liberalism despite neoliberal rhetoric of supporting individual freedom and limiting overbearing governments.
Neo-liberalism as a key school of economic thought was politically solidified with the democratic elections of Thatcher and Reagan. Examples of neoliberal economics in action would be the removal of capital controls in the UK and Reagan’s Tax Reform Act of 1986. After Thatcher and Reagan’s time in government, neo-liberalism remained the dominant economic ideology- it was enshrined into the global economy with the institutional settings of the IMF, World Bank and the US Treasury- known as The Washington Consensus. Both Blair’s Labour Party and Clinton’s Democrats remained committed to neo-liberalism with their Third-Way approach to governing.
The Outriders: Hayek and The Mont Pelerin Society
In 1947, the capitalist economist Friedrich Hayek invited 39 scholars to the small Swiss village of Mont Pelerin. In this small village, they were to discuss the role of the state, interventionism and the promotion of the free-market. With the aim to promote ‘Western’ values, combat Marxist/Keynesian economies, and to protect private property and the competitive market.
The Institute of Economic Affairs:
Founded in 1955 by Anthony Fisher, the Institute of Economic Affairs quickly became a key part of the Conservative Party infrastructure with its ambition of promoting free-markets and privatisation of the public sector. A significant amount of funding for the IEA comes from tobacco lobbyists, while the IEA argues against health regulations, doing the dirty work of big Tobacco. Its transparency has been rated as highly opaque and is described as a ‘sock puppet’ think tank of the tobacco companies.
The Manhattan Institute for Policy Research
In 1977, Anthony Fisher established another think tank, being the Manhattan Institute for Policy Research. This think-tank was also co-founded by William Casey, who later became Ronald Reagan’s Director of the CIA. The Manhattan Institute is perhaps best known for producing the Broken Windows policing theory which was adopted within New York City and later led to the militarisation of American police forces in urban areas. It is also responsible for the terming of the phrase ‘axis of evil’ to describe Iraq, Iran and North Korea.
The Atlas Economic Research Foundation (Atlas Network):
Founded in 1981 by the ever-busy Anthony Fisher, the Atlas Economic Research Foundation aimed ‘To strengthen the worldwide freedom movement by cultivating a highly effective and expansive network that inspires and incentivizes all committed individuals and organizations to achieve lasting impact’. Taking its name from Ayn Rand’s Atlas Shrugged, this cigarette and petroleum funder think is now known as the Atlas Network. It runs leadership training, networking and outreach programmes while funding research grants for likeminded researchers.
The Bilderberg Group
The ever-secretive Bilderberg group was established in 1954 by Jòzef Retinger, over concerns of rising anti-Americanism across Western Europe. With the ambition to promote Atlanticism and foster political, economic and defence cooperation between North America and Europe. Its original membership included Prince Bernhard of the Netherlands, the former Belgian Prime Minister Paul van Zeeland, the head of the Unilever cooperation, the then head of the CIA and President Eisenhower’s advisors. It was funded by the Ford Foundation from the late 50’s towards the early 60’s with the ambition to ‘bolster a consensus around free market Western capitalism and its interests around the globe’. The group uses a secretive meeting structure which allows members to speak candidly and off-the-record.
The Adam Smith Institute:
Named after the Scottish philosopher and forefather of modern free-market capitalism, the ASI was formed by Madsen Pirie and the Butler Brothers in 1977. This neo-liberal think tank was quickly used by Conservative and New Labour governments as the primary intellectual force behind the privatisation of state-owned industries and the direction of public health policy. The ASI receives a large amount of its funding from the tobacco industry while its director Eamonn Butler actively campaigns for Forest (a pro-smoking pressure group). The ASI has received millions from the UK government in funding grants while reporting an annual turnover of £130 million.
The Heritage Foundation:
This American based conservative think-tank was created in 1973 with the mission to ‘formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defence’. With the publication of the Mandate for Leadership report, the Heritage Foundation aimed to reduce the size of the federal government. This report quickly became the building block for Ronald Reagan’s presidency with many members of the Foundation holding positions within Reagan’s administration. As a result, 60 per cent of the foundations 2000 proposals were adopted within the first year of presidency. These included cuts to state programmes, increase in defence budgets, the development of new ballistic missiles to vastly different foreign policy. The Foundation later became the intellectual force behind George Bush Sr’s Operation Desert Storm in Iraq and a key proponent behind the culture wars of the 1990’s in America.
The American Enterprise Institute:
Founded in 1938 in Washington DC, the American Enterprise Institute primary motivation is to ‘defend the principles and improve the institutions of American freedom and democratic capitalism—limited government, private enterprise, individual liberty and responsibility, vigilant and effective defense and foreign policies, political accountability, and open debate’. Founders included executives from Chrysler, General Mills and Chemical Banks. The Institute was considered to be the leading intellectual organisation behind George W. Bush’s administration with AEI members including Dick Cheney amongst twenty other members of presidency staff. The Institute also provided the intellectual and strategic framework for the ‘surge in Iraq’. It receives an annual revenue of 85 million dollars a year including a million from Exxon Mobil. The think-tank has been criticised over its anti-climate change reports.
The Cato Institute:
Originally known as the Charles Koch Foundation when formed in 1974 by Ed Crane, Murray Rothbard and the humble Charles Koch. This libertarian free-market think-tank holds a mission statement of: ‘To originate, disseminate, and increase understanding of public policies based on the principles of individual liberty, limited government, free markets, and peace’. Throughout its existence the Cato Institute has opposed NASA, Social Security, The US Postal Service, the TSA, public schooling, public transport, public broadcasting, minimum wage laws, overtime regulations, the prohibition of child labour and public-sector unions. The Institute is funded by major corporations including Google, FedEx, CME Group and Whole Foods. This think-tank holds an incredible lobbying influence while many alumni occupy positions of presentation throughout the US government, academia, economic institutions, corporations and the legal system.
Summary:
The threat to trade unions posed by neoliberal think-tanks:
The think-tanks mentioned above pose a significant threat to trade unions and their members. These incredibly influential groups, which offer government the intellectual framework to follow a particular policy area, are often funded by major union-busting corporations. With giant corporate funded budgets and an incredible lobbying influence, the neoliberal think-tanks have been able to infiltrate positions of government, academia, economic institutions and the legal system, ensuring that the neoliberal ideology continues to dominate global politics.
The 2017 election in Germany and its impact for Europe and for the UK
Paper presented to ERIS meeting February 2018 by Stephan Pfeifer)
The Election Background:
Since 2005 Angela Merkel has been the chancellor of Germany. But she, her Christian Democratic Party (CDU) and their Bavarian sister Party, the CSU, always needed a coalition partner: 2005 to 2009 the Social Democratic Party (SPD), 2009 to 2013 the neoliberal FDP. From 2013 to 2017 the SPD again. The politics of Angela Merkel shifted often during that period. But all these partners and shifts didn’t really affect her majority. It was the smaller coalition partners who lost most in all three coalitions.
In the last years a few political shocks changed the western world.
The flight of refugees to Europe to leave war and misery in near-east and Africa behind, the Brexit-Vote of the people in the UK, the election of Donald Trump with his “America first”-politics put the “strong and stable” Merkel-government under pressure.
In the political system of the past 70 years it was the political left – the SPD, the Greens since the 1980’s and the party The Linke (Left) since the 1990’s – who put the conservatives under pressure. But in 2017 it seemed to be different: Fundamental critics of Angela Merkel came from the right-wing. The Bavarian CSU criticised Merkels refugee-politics as “illegal”. The “Alternative für Deutschland” (AfD) a far-right party with organizational links to Pegida and Neo-Nazis won influence over the agenda-setting in the public political discussion. Even the FDP – a social-liberal party in the 1970’s, a neoliberal party in the 1990’s – shifted to a nationalistic rhetoric.
The result of the general election in Germany on 24th September 2017:
In the national election in September 2017 CDU/CSU (Union) got 32.9% of the votes and one third of the members of the national parliament (Bundestag). The SPD with chancellor candidate Martin Schulz got less than 20%. The FDP and AFD, who weren’t in the parliament 2013 – 2017 because in the last election they failed to get the 5% they needed to get in to the parliament, but in 2017 they got 10.7% ad 12.6%. “The Left” (Die Linke) and the Greens (Die Grünen) got around 9% each. All other parties together (Andere) didnt reach the 5% barrier and so didn’t get into the Bundestag.
The Result (in German: Wahlergebnis):
The wins and losses (Gewinne und Verluste) of the parties show that both partners of the grand coalition 2013-2017 (The Union and the SPD) had significant losses since the 2013 election: CDU/CSU (Union) lost 8.6% of their votes and the SPD lost more than 5%. AFD won almost 8% in comparism to 2013 and the FDP 6.0%. The party “Die Linke” and the “Greens” were stable:
Creating a government:
The AFD as a party of fundamental opposition and right-wing provocation is not likely to be a partner in any government. Therefore the result of the election enabled only two possible majorities for a government: a new coalition of CDU/CSU and SPD (with together 14% less votes than the last election) or a coalition between CDU/CSU, the FDP and the Greens (called Jamaica-coalition cause of the party-colours black, green and yellow).
In the night after the election Martin Schulz proclaimed the SPD would not take part in a coalition with the CDU/CSU. For him the cause of the losses of the SPD was the “grand coalition” and the politics of Angela Merkel. He wanted a “renewal” of the SPD in the opposition. This decision forced exploratory talks between CDU/CSU, FDP and Greens. But these talks unexpectedly failed. The FDP refused to make compromises with the Greens and the moderate Mrs. Merkel. They wanted stronger anti-refugees politics and didn’t accept the EU-initiative of Emanuel Macron.
Germany without a government or will there be a new election?
President Steinmeier intervened and asked all parties to search for a solution. Martin Schulz changed his attitude and began exploratory talks with the CDU/ CSU. On the basis of results of these exploratory talks 55% of the delegates of a SPD-congress voted “Yes” to coalition-negotiations. The SPD-members were asked in a survey about the coalition-contract. The members debate was controversial and emotional. The young socialists started a spectacular “no to the coalition” campaign and won thousands of new members. However, in the end 66% of the SPD-members said yes to the contract. On 14th of March the new CDU-/CSU-/SPD-coalition was established. Six months after the election.
Which direction will the SPD choose?
In 2017 the SPD had their worst result since the second world war. The “grand coalition” was not the only reason for the defeat. In fact the party has lost its social democratic profile over the last 15 years. More and more people don’t know what the SPD stands for. A renewal “from top to toe” was necessary. To go into opposition against a Jamaica-coalition could have been an electoral disaster, but the failure of the Jamaica-coalition changed the situation completely. CDU/CSU had no other possilbe partner than the SPD. For the SPD the alternative now was; either go into a new coalition with a good negotiation-position and the possibility of bringing forward social democratic intiatives in: Or go into a new election with only a few arguments to vote for the SPD – except the call for opposition and “revival”. Martin Schulz and the leaders of the party changed their position and began to suggest that there would be chances in Government to make te “life of the many people easier”. They promoted a politic of investment in education, families, social security, pensioners, everyday life, healthcare and Europe – in place of the austerity measures the previous coalition had introduced. The following table shows the issues that were particularly important to the parties in the exploratory talks.
CDU/CSU CSU SPD:
No increase in the top tax rate Extension of the maternity pension Investing in education; i.e. Free daycare for children
No new government debt Limitation of the number of refugees Legal fixing of the pension level , Minimum pensions
No to a change of the health insurance system Make permanent employ-ment relationship the norm again
No driving ban for diesel cars Climate Protection Act
Maghreb states are considered safe countries of origin Eurozone investment budget
Family reunion narrowly limit Skilled workers immigration law. Merkel remains chancellor. Parity between employers and employees in the financing of health insurance
The way forward in Germany, EU and the UK:
In the new German government the SPD is in a stronger position than in the old one. They have one more key-ministry – the Treasury Secretary. The German “Mr Austerity” Wolfgang Schäuble (CDU) has left the government. The coalition contract and the positions in the government give the cooperation of Germany with France and the European partners a new perspective for public investment and social progress.
Nevertheless the SPD is in a difficult situation. As the smaller partner they could be forced to defend the politics of the CDU/CSU, with the danger of losing further trust of the people and their remaining social democratic profile. If the SPD is not able to develop their profile for social justice, sustainable economic development and a humane, open society the SPD runs the risk of decline as seen in the social democratic parties in France and the Netherlands.
One of the possibilities for a revival could be a new ‘social democratic initiative for Europe”, a new vision of a social and strong Europe for peace and welfare. Such an initiative should include arrangements for employment and apprenticeship, investments in public housing, new mobility with less CO2 and with renewable energies. The partners could finance these initiatives by dealing with tax-havens inside and out of Europe, prevent tax and wage-dumping and establish the overdue financial transaction tax.
Such a new initiative should include the SPD in Germany, the Labour Party in the UK, the Social Democratic Workers Party (SAP) in Sweden and – why not – Emanuel Macron’s “En marche”. Such an initiative could support those who search for the UK to find a way out of the Brexit – Dead End. It could even strengthen the possibility of an active politics for a better life for the hundreds of millions in Europe instead of austerity, fear and nationalism.
Neo-Liberal policies attack workers; consequences in the Basque country.
(Transcript of speech given at ERIS meeting March 2018 by Oscar Arenas Velasco):
First of all, we want to show our sincere gratitude for the invitation to share this space. Encounters like this are absolutely necessary in this Europe that seems, at times, to be coming apart at the seams. So what am I going to tell you …
When we were asked to come and talk about the consequences of the neo-liberal policies for Basque workers, we asked ourselves a first question. How do I explain in a few minutes what has happened in Euskadi and Spain, in this increasingly influential supranational context? We could give a chronology since 2007, but we believed that a mere succession of the “ephemerides (constellations) of austerity” was not going to delineate effectively the relevance of what has happened. If we must define the current scenario, the result of a decade of crisis and neo-liberal policies, we should almost approach it as the crime scene of an episode of “Sherlock”, that magnificent TV series. So let’s look the clues and take the necessary perspectives to give an accurate analysis of what happened, look for the instruments used and see, finally, if we can find those persons responsible for it.
First piece of evidence; what is the macroeconomic scenario in Euskadi? The most optimistic analysis says that the worst of the crisis has passed. The Basque economy grew in 2017 at a rate of 3%. The index of industrial production was growing at the same pace. The collection of taxes was in figures of historical record, with 12% more than in 2016. This growth reached to the whole of the Basque territory and to all sectors, with the exception of agriculture, which in clear decline in Euskadi.
Now, was that improvement transferred to the whole population? According to the latest data published by the national institute of statistics, salaries grew in Euskadi between 2008 and 2015 by 6.7%. Inflation, on the other hand, was going to 11.5%. In fact, for a long time our community had the highest salaries in the state, among other things because of the presence of a strong industrial sector. However, in 2017 it was not like that anymore. Madrid passed us by a little. With €1,934 gross monthly average we are € 300 above the state average, but we have already seen the tremendous loss of purchasing power of our salaries. And Euskadi is, in addition, one of the territories with the most expensive shopping baskets, and with some of its cities having the highest house prices in Spain. The real estate market and what happened in Spain, by the way, would give for another talk, but it is not the object of today.
And speaking of markets, the one of labour, how is that doing? 2017 ended in Euskadi with 915,900 employed people, an increase of 13,800 jobs compared to 2016, and far from the 1,009,900 jobs in 2007. An important factor in this is, as we said before, that there was an important and strong industrial sector but that has declined. The increase in jobs in 2017 is mainly due to the services sector. In fact, the weight of industrial employment in Euskadi has dropped two points, to 22.8%. The employment that has been created, in addition, has been fundamentally temporary. And with a strong component of partial working days, which mainly affect women. Unemployment rates, on the other hand, closed 2017 at 10.6%, far from the 6% in 2007.
In Euskadi there are, on the other hand, 350,000 workers with their collective bargaining paralyzed, without agreement or with agreements extended but without negotiation, as if they were zombies. Here we could also speak about the strategy of some nationalist trade unions that have corporatized and privatized the union action, disguised as a false radicalism. But that’s a story we leave for another day…
Regarding the risk of poverty and social exclusion, although the indicators improved in 2016, there is a risk of creating chronic social inequalities. And we are, in spite of these figures of growth of the economy, far from the position we had in 2007-2008.
We could continue with some more information, but the essence of this perspective is already expressed here. There seems to be a recovery of the macro data of the Basque economy. But it is a recovery that has not reached the whole population: there has been a general wage devaluation, working conditions are worse today and it is much easier to dismiss the workers than before.
The “social elevator” has been broken and the redistributive policies in fiscal matters shine by their absence. The benefits, which are being generated and at a good pace, are concentrated in the hands of an oligarchy and do not reach the entire population, or when they do it is slow and difficult. Euskadi is not that Garden of Eden promised by some institutions.
The second piece of evidence; how did we get here? What has been the instrument used?
The first instrument was labour reforms from the socialist government of Rodríguez Zapatero, but especially those in the policies of Rajoy. We have experienced reforms whose objectives were not even hidden. Given the impossibility of monetary devaluation, as used in the 1980s, there was now a generalized call for wage devaluation. And as we have seen, it has been achieved. And it has done by breaking the collective scope, attacking the bargaining power of the union, atomizing labor relations and introducing a large imbalance that only favored entrepreneurs and employers.
The second instrument was a legal one, criminalising what were previously workers rights. Known in Spain as “ley mordaza” or “gag law”, the government sought to stifle social protests with threat and fear. A reform of the Criminal Code was directed especially against the right to strike. More than 300 trade unionists have come to be disproportionately and unfairly prosecuted for exercising their right to strike. A universal right, let’s not forget, especially protected by international and European law. The government of the PP, even, has been threatening a new strike law for several years, aimed primarily at cutting the possibilities of it.
The third instrument came hand in hand with a reform of the Spanish Constitution. The Constitution of 78 has only been reformed twice in its 40-year history. The first was in the year 1992 to bring compliance with the Maastricht Treaty, to recognize the right to active and passive suffrage to the nationals of other EU member states in municipal elections. The second, in 2011 included the concept of “budgetary stability” or “golden rule”. That limited to the extreme the capacity of the state and the regional governments to borrow, and established the preference for the payment of the debt prior to anything. A reform carried out behind citizens’ back, not explained enough and not voted on in a referendum, despite it being a major change that directly affects the welfare state promulgated by the constitution itself.
Here we could also give some more data and ideas, but these are fundamentally the three tools used to reach this scenario: cutting of labor rights, hardening of the criminal threat against the legitimate protests of citizens, and public institutions tied by the feet and hands to carry out social policies.
So we have already defined the crime scene and the weapons used … So where do we place the authorship? Here it is not necessary to think about it a lot. The crisis has been compared to a tsunami that devastated the welfare state in its path.
Let’s see; crimes, unlike accidents, are motivated by a will. Neither the crisis nor the policies executed in theory to combat it have been the result of a meteorological phenomenon devoid of purpose or self-will. The crisis is the result of the neo-liberal policies that since the end of the 70s have been deregulating markets and establishing proposals that only benefit the economic elites. And when this house of cards fell by its own weight, the response has been more neo-liberal policies. But we all pay the price.
These policies have come both from national and European institutions (even worldwide, in the case of the IMF). Faced with them, there has not been a social democracy in Europe for a long time that has shown itself to be capable of opposing these changes. What someone called “heritage of humanity”, the European welfare state, is now in serious danger.
I’m coming to the end now. We live a complicated time not just in the Basque Country, but in Europe. Maybe it does not look like it, but the EU is still a boy in puberty, because of the lack of building a true social project for its citizenship; a shared and common project. This is a child in a moment of change. A child who has to decide what he wants to be when he grows up. Gramsci described this situation very clearly: “The old world is dying, and the new world struggles to be born: now is the time of monsters”.
The monsters are here. It is the extreme right, the nationalism and populism, that grows throughout Europe. It is enough to see the electoral results in France, Germany, Austria, Holland … But also the terms in which the debate on Brexit was held. I will not say more about that here. There has already been much and very good analysis about the crisis of class identity and the use that the extreme right makes of it to agitate workers against workers, with the excuse of different countries flags. Violence is agitated and a kind of common enemy has been created to keep us up in our own pieces of land, as if that were the solution. Perhaps, the one who best expressed it was Bauman, who left us a little orphaned when he left. He used a fable from Aesop, the hares fable, which should be required reading in schools.
I will finish now. European trade unionism has an important task in front of itself. It must overcome imposed contradictions. It must overcome those lands of cheating speeches generated by the extreme right. We have to be a fundamental agent to build another Europe. We have the ability, and it is essential that we weave those seams that I said at the beginning that seem to tear in Europe. Therefore, let’s demand our role.
Oscar Arenas Velasco March 2018
ERIS Book Reviews:
What is Populism?
Jan-Werner Müller
A good guide to present day populism. Populists reveal themselves when they try to deny the legitimacy of their political opponents. They claim to be the only legitimate representatives of the people. Müller clearly shows they are anti-Liberal and anti-democratic, a real threat to democracy. Müller’s arguments are not only brilliant but he offers solutions too!
By Basil Bye. February 2018
Inside the mind of Marine Le Pen
Michel Eltchaninoff
A useful and well argued book. Eltchaninoff says much about what drives Le Pen and the ideas that have shaped her. Despite her efforts to give nationalism a human face and to project a more respectable image-the Front remains the bastion of anti-globalist, xenophobic, anti-European right. A continuing threat to French Democracy.
By Basil Bye. March 2018
After Occupy: Economic Democracy for the 21st Century
Tom Mallison (Oxford University Press)
A useful addition to cannon of books written on creating workers control in the economy. Malleson is particularly interesting in his considerations of the democratisation of the market and the financial system. Socialist alternatives to a state controlled economy are essential for 21st Century socialists and social democrats and this book gives food for thought and action which ties in well with Labours work on Alternative Models of Ownership programme.