The italian website Bollettino Culturale hosted the following interview with Stavros Mavroudeas on the COVID-19 pandemic and its consequences on the economy and labour
1. How do you judge the management of the pandemic in the European Union?
I have argued elsewhere (https://stavrosmavroudeas.wordpress.com/2021/02/11/the-economic-and-political-consequences-of-the-covid-19-pandemic-ope-l-lecture/ , https://stavrosmavroudeas.wordpress.com/2021/02/04/the-economic-and-political-consequences-of-the-covid-19-pandemic-by-s-mavroudeas-international-critical-thought/ ) that the COVID-19 pandemic is a twin crisis. The economic crisis was already simmering (because capitalism failed to devalorise adequately capitals after the 2008 crisis) and the coronavirus triggered and aggravated this crisis.
EU’s response was similar to that of the US but with a marked difference in policy ‘firepower’. As after the 2008 crisis, US and the EU embarked on social-liberal policies (hence, non-neoliberal policies) dictated by the now dominant New Keynesian Macroeconomic Consensus. These policies involve typical Keynesian measures: expansive fiscal policy and accommodating monetary policy. They also involve an insult to neoliberalism: discreet industrial policy. However, and contrary to the myopic and reformist anti-neoliberal ‘Left’, these policies are neoconservative and not in favour of labour and the working class. They share with neoliberalism putting the burden on labour but they radically depart from neoliberalism by actively using the public sector to buttress capitalist profitability.
As I already said, EU followed this path. But the ‘ammunition’ used (that is fiscal and monetary expansion) is markedly lower than that employed by the US. This derives from two factors:
- Germany (and the ‘prudent’ block around it) do not want to expand these packages very much as they carry the main burden for their financing.
- The US has more policy room for maneuvers because of the dominant role of the dollar as the main world reserve currency
2. Do you think that the NGEU money represents a potential radical change in European economic policies or will the emergency be used for a transition to a worse model of society than the pre-Covid one?
As I already argued, these social-liberal neoconservative policies won’t ameliorate the position of labour. The NGEU is a tool for restructuring European capitalisms in the face of the US and China antagonisms. Its priorities favour specific sectoral interests (grossly dictated by the main EU conglomerates) and following an industrial strategy aspiring to enhance their position vis-à-vis their US and Chinese counterparts.
The NGEU obeys the directive of creating ‘European champions’ (that is big European multinational conglomerates capable of confronting US and Chinese competitors). Therefore, it will lead to the increased concentration and centralization of capital (that is oligopolisation and monopolization). This will hit hard peripheral and Mediterranean capitalisms that are characterized by a huge layer of mid-size enterprises. Regarding labour, there is no commitment to increase wages. On the contrary, the planned recovery is based on keeping wage costs low. Of course, capitalism may make plans, but it is also riddled with contradictions. Thus, because of this violent capitalist restructuring, there appears nowadays – at least regarding specialized labour – a lack of labour supply which results in increasing wages in these sectors.
3. For the post-pandemic future, do you think the Green New Deal is a strategy to support? In recent months there have been many discussions within the unions in Italy on the use of this type of economic policies to create well-paid jobs for graduates, to foster a situation of full employment to be associated with «job guarantee» policies. What do you think about it?
The Green New Deal is part and parcel of these neoconservative social-liberal capitalist restructuring. It has been promoted as the Keynesian New Deal of our times. And the myopic and reformist majority of the Western ‘Left’ immediately jumped upon it and acted as the best marketing advertisers of capitalism. The Green New Deal is to great extent a crypto-protectionist industrial strategy that aims to support Western capitals against the challenge from China and the emerging markets.
It is green only in name as it oscillates between (a) fending off competitors (with worse green credentials) and (b) not hurting the vested interests of Western capitals (by imposing to harsh green restrictions). Recent regulatory tugs-of-war regarding energy and shipping are exemplary cases.
It does not envisage increasing wages. This is a fantasy of the majority of the reformist Western ‘Left’. On the contrary, because of the capitalist restructuring that it entails, many gobs will be lost. In Greece there is a typical example with the abrupt ending of lignite electricity factories. This has increased the electrical energy costs for the Greek economy (which trickle down to consumers’ bills and increase energy poverty) and is devastating the regions with lignite (causing increased unemployment and poverty). Of course, on the other hand, it favours specific entrepreneurial interests with huge influence on Greek governments (SYRIZA included).
There is no full employment and increased wages in the fairytale of the Green New Deal. Trade unions that play this game are simply pawns of capital. If one has a look at mainstream environmental literature he will discover that one of its stylized facts is that the existence of trade-unions is anti-environmental because they favour wages over green policies. The conclusion is that these two are contradictory.
4. The pandemic has demonstrated the shortcomings of welfare in Europe due to the austerity policies of past decades. Do you think this experience can be used to reform welfare for the better? Some communist organizations have proposed a universal basic income to solve the problems related to the lack of income created by the lockdown. Do you think it is a viable solution and with which to solve the problem of unemployment in Europe or rather that it represents a resignation towards the high unemployment rates in our countries?
In the short-run and in the mid-run there is an increase in funding the public health sector because it is the only one capable of confronting the pandemic. However, the more profitable areas (vaccines, drugs etc.) have been kept for the private sector and subsidized with public money. I expect that, once the pandemic has ebbed, to reverse at least some of the expansion of the public health sector and reinvigorated the share of the private health sector.
Regarding the welfare system in general, social liberalism is no better than neoliberalism. Social liberalism wants also to curb public expenses; particularly in the aging Western economies. However, it is cleverer than neoliberalism and comprehends that the public sector has to be the backbone of the system and bear the main costs. Also, that strict regulation by the state or para-statal bodies (like the infamous independent supervisory authorities) is required or else private capitals will cause a havoc.
I totally disagree with the idea of the universal basic income. It is a neoconservative proposal mouthed initially by M.Friedman. It is being considered by social liberals and neoliberals alike as a low safety net to prevent social upheavals and revolutions. It will also work as a disincentive to struggles for increasing wages. It reminds Roman empire’s policy of ‘bread and circuses’ in order to keep the Roman proletariat subdued.
5. The working day in Greece was recently extended to ten hours. Can you explain to us what restructuring plan of Greek capitalism is behind this political choice?
This is part and parcel of the neoconservative labour flexibility policies (which again the majority of the myopic and reformist Western ‘Left’ espoused and touted). It will extend the actual working time at the expense of growing unemployment. It will increase also the rate of surplus-value (that is labour exploitation) as overtime is practically abolished (which was paid higher) and extra work-time is not paid but rewarded with additional vacations (!!!). Greek capitalism’s plan is to suppress further wage costs.
6. In Italy we are discussing in these days about the end of the ban on redundancies. The unions have opposed the idea of a selective end of this measure based on the situation of each individual sector, proposing a reform of the social safety nets. Are there similar discussions in Greece?
There is a general governmental declaration that the public budget is exhausted and that, once the pandemic has ebbed, these employment protection measures will be withdrawn. In Greece, firms that took subsidies and support against the pandemic where required not to fire their workers. On the other hand, their workers, once put in employment suspension (that is worked less) were paid only a fraction of their normal wage. Nowadays, many entrepreneurial mouthpieces (particularly from the disgracefully uninhibited tourist sector) tout that these employment protection schemes are disastrous as workers prefer to take these subsidies instead of working for meagre wages in other places from their residence.
There is another complication. These employment schemes have facilitated statistical tricks with the unemployment rate and thus kept it artificially low. This is necessary for the right-wing New Democracy government as it tries to engineer a double-election plan probably in autumn (banking upon SYRIZA’s dismal performance). Increased unemployment is not good for this electoral strategy. Thus, the government shies away for the time being from shedding these employment protection schemes. But in the end, elections or no elections, it will abolish them.
Official trade-unions (GSEE etc.) in Greece are mainly government’s and capital’s stooges. So no serious discussions on these issues takes place and the public does not pay, in any case, attention to them.
7. In this phase of economic recovery, Italian entrepreneurs are criticizing citizen’s basic income (a form of workfare still not functioning). Young people prefer to receive this income rather than very low wages for many hours of work in the tourism or catering sector. Instead of raising wages, they are demanding the cancellation of citizen’s basic income. This story makes a problem glaring: many workers are poor even though they work because of very low wages. In my opinion, it is a problem linked to the Italian production system specializing in low added value products. As a result, many companies can stay on the market either with public money or by lowering wages and canceling workers’ rights. Will these problems be exacerbated by the consequences of the pandemic? How should a political force that defends the workers intervene on these problems?
I have already replied to this in previous questions. Let me codify my view. Bankruptcies and redundancies will increase after the removal of the protection schemes. This is the natural course of a capitalist crisis. Bourgeois governments intervene in this cycle by trying to defer some of the brunt of the crisis mainly on individual capitals but also on labour. They do so because they fear that if the crisis takes place without restraints then the system will face economic collapse and social revolution. However, once the zenith of the crisis has been surpassed then the costs of these policies have to be paid. There is no free lunch in capitalism and the essentially Keynesian Modern Monetary Theory (MMT) is totally wrong (for a critique see https://thenextrecession.wordpress.com/2019/01/28/modern-monetary-theory-part-1-chartalism-and-marx/ ).
The Communist movement and the Left (that is worthy of its name) should pursue class politics against capitalism and at the same time fight so as the burden of the crisis is paid by capital and not labour.
The system belongs to capital and, hence, it is capital (and not labour) that must pay for its twin (health cum economic) crisis.
But the Left and the Communist movement must see clearly who the real adversary is. The lachrymose anti-neoliberalists and the pleas for more state interventionism do not challenge the capitalist policies. They simply support the change of the system’s administrators. Neoliberalism has died and the bourgeois state – which has never left on crucial issues – has already returned. But today’s social-liberal Orthodoxy simply promises to the working class some aspirins as cure for the socio-economic cancers that the system creates. It is this returning state interventionism that generously supports capital and seeks to pass the burden on workers. And it is the dominant neo-Keynesian policies that are the vehicle of this change today. The Left and the Communist movement must fight against all forms of capitalist restructuring; neoliberal and social liberal and propose socialism as the only credible alternative.
In terms of transitional demands, communists and the labour movement must strive for the de-commodification of key areas of economic activity and the provision of their products and services through public systems. The case of health case is today the perfect case in point. The establishment of public health systems (with strong funding and staffing and without indirect forms of privatization) is an urgent need; especially given the frequency of contemporary major epidemics. The financing of these schemes must be based on robust progressive taxation systems hitting capital.
Additionally, they must stand firmly against the ‘new normality’ that capital is trying to impose. The weakening of labour protection laws must not be tolerated and the latter must be further strengthened. Particular attention must be paid to the intended change in employment relations through telework and the new forms of control and intensification of work that the capital seeks to impose.
Last but not least. The coronavirus pandemic and the imposed ‘social distancing’ have severely restricted political and social rights. It is already evident that the system is experimenting with these limitations both for their general application and for new forms of ideological manipulation of the people. The Left and the Communist movement must firmly repulse these efforts.
8. One form of work that has spread rapidly due to the pandemic is smartworking. Its spread has led to many discussions in trade unions in Italy. Personally, I associated this form of work with domestic industry analyzed by Marx in Chapter 13 of Capital. It seems that the contemporary labor landscape is moving towards what Ricardo Antunes calls the «uberization» of work – an unstoppable entrepreneurial modus operandi, which seeks profit and the increase in the value of capital through forms of precarious labor expanding on a global scale. Therefore, this «uberization» of work, added to the legislative gaps and their possible harmful consequences, favors the emergence of a series of difficulties related to remote work: individualization of tasks, social isolation, loss of collective action, increased load of work … with consequences on the physical and mental health of the worker. Do you think this form of work can still expand or will it decline sharply as soon as the pandemic is over?
I have already referred to this in the previous questions.
I would like to add a few points.
As part of its restructuring policies capital attempts again to subcontract several jobs that are amenable to this. In the current socio-political climate, this subcontracting minimizes capital’s costs and shift them to precarious workers (branding them ‘entrepreneurs of themselves’ and trying to instill to them this reactionary ideology).
However, there are contradictions in this policy as capital may minimize its costs but it loses its ability to control and direct these workers. The factory system was created with capitalism because only through this the managerial prerogative of the capitalist could be really established (real subsumption of labour by capital) and continuous increases in labour productivity achieved. ‘Uberization’ poses the danger of losing capital’s ability to efficiently direct and control labour. In order to avoid this possible loss, additional costs of supervision and control (cameras, applications etc.) are incurred. The ultimate balance is far from sure. The same holds for its ideological impact.
9. The pandemic has shown how central work still is. It blatantly denied all the analyzes on the end of the work that emerged in the last forty years. Is this further evidence for the validity of Marx’s labor theory of value?
Marx’s Labour Theory of Value holds in any case. Today’s twin crisis, once again, verifies the centrality of labour. However, capital and its mouthpieces have, even before the crisis, touted the end of labour through the marketing of the non-existent 4th industrial revolution (for a critique see https://stavrosmavroudeas.wordpress.com/2019/07/17/4th-industrial-revolution-myth-or-reality/ ). The turn towards automation during the COVID-19 pandemic has increased this ideological attack. After all, it is always capitalism’s fantasy a world without the annoying presence of labour. The problem is, as Marxism very appositely shows, that if there are no workers then there is no capital.