“The changes of capitalism since the 1980's are usually explained by a twofold revolution, in computers and in finance. These undeniable aspects are dimensions of a deeper movement: a bourgeois counter-offensive.” (Gilles Dauvé & Karl Nesic) [1]
Police at the Battle of Orgreave during the UK miner's strike, a decisive moment in the bourgeois counter-offensive against the class struggle in the 1980s
1. It is not possible to separate the bourgeoisie’s response to the economic crisis that opened up in the 1960s from its response to the revival of class struggle
The open reappearance of capital’s historic crisis from the mid-1960s, which was announced at the economic level by a fall in world production and a rise in unemployment and inflation in all the major economies, signified the definitive end of the post-war period of “prosperity”.
The same period saw a return of the class struggle to the centre stage of capitalist society. This was driven not only by the economic crisis but also by a wider crisis of capitalist society at the social, political and ideological levels. From the mid-1960s we see a worldwide wave of protests against war, state repression and the dominant values of bourgeois society as well as political protests and workers’ strikes, in which a key factor is the existence of a new generation of proletarians who had not experienced the counter-revolution that followed the defeat of the 1917-21 revolutionary wave.
2. The role of Keynesian policies and state structures was to manage the class struggle
In 1945 two main preoccupations of the bourgeoisie were how to apply the lessons learned after the economic crisis of 1929 and, above all, how to ensure social peace and avoid any potential threat from the working class. The institutional structures and policies put in place at the level of the western imperialist bloc and based on the enormous economic and military preponderance of the USA were therefore intended to ensure:
- effective state control of the economy
- cohesion of the bloc against its rival
- social peace.
This last was to be achieved by boosting demand through state expenditure based on credit, which enabled the bourgeoisie to concede wage rises and increased spending on social welfare to be paid for by future exploitation, and to offer the working class - at least in the most advanced economies - the ideological promise of full employment and rising prosperity.
3. The reappearance of the economic crisis and the revival of class struggle signified the crisis of Keynesianism
By the end of the 1970s there was a general recognition by the western bloc bourgeoisie that the policies and institutional structures associated with Keynesianism were no longer effective in ensuring the conditions for continued accumulation and bourgeois class domination.
Faced with a rising wave of social unrest and workers’ strikes, the bourgeoisie - not only in the Stalinist eastern bloc but also the ‘democratic’ west - did not hesitate to use state repression. But this was clearly not a long-term solution. In the major economies of the US bloc the bourgeoisie continued to concede wage rises above the growth of productivity and increased social spending, but this could only further reduce profits and increase debt, exacerbating the economic crisis.
At the economic level the bourgeoisie needed to remove the obstacles to continued accumulation and restore profitability. But it could only do this by mounting a massive frontal attack on the working class to force down real wages, cut social spending and increase the rate of exploitation. The new strategy that emerged from the end of the 1970s combined massive attacks on all the gains of the working class in the preceding period with a major restructuring of capitalist production at a bloc-wide level.
4. The adoption of 'monetarist' policies and the 'war against inflation' were part of a political offensive against the working class
In 1979 the US Federal Reserve announced that it would restrict the money supply to banks (the "Volcker Shock"). Further announcements followed. Under the banner of the 'war against inflation' the US state in effect turned off the supply of credit that had financed economic growth and enabled the bourgeoisie to manage the class struggle since World War Two, immediately causing interest rates to soar to unprecedented levels and plunging the world economy into a steep recession.
This was a deliberate 'shock and awe' tactic: a brutal reassertion of American economic power which pushed the effects of the economic crisis onto the rest of the bloc; but above all it was a re-assertion of the power of capital over a working class that continued to resist.
The ensuing global recession gave an impulse to massive attacks on working class conditions by every national bourgeoisie. The result was a wave of factory closures and job losses spreading from the US to Europe and Japan that amounted to a process of industrial ‘desertification’. Unemployment in the US rose to the highest level since the Great Depression.
5. The offensive of the bourgeoisie was aimed at destroying the power of the working class in the capitalist heartlands
The adoption of monetarist policies and attacks on working class wages and conditions were accompanied by a long-term strategy to restructure capitalist production in order to break up the main centres of working class militancy in the capitalist heartlands of the USA and western Europe. The main features of this strategy were:
Reorganising production
In traditional centres of working class militancy like Detroit, Renault-Billancourt, Turin and the Ruhr, the bourgeoisie introduced measures to curb workers’ influence over production, completely reorganising and where possible automating existing work processes, which facilitated the dismantling of large concentrations of workers, accompanied by a management offensive against militant workers, outsourcing, temporary and part-time working, etc. [2]
Developing new industries and technologies
Driven by the development of the microprocessor and under the ideological cover of a ‘third industrial revolution’ the 1980s saw a huge development of computing and communications technology that enabled the reduction, fragmentation and territorial dispersion of large concentrations of workers and the introduction of new, more flexible and intensive work processes into more and more sectors.
Shifting capital to parts of the world with low labour costs
As the economic crisis worsened and profit rates continued to fall in the 1970s capital began to flow from unprofitable industries in the advanced western economies towards ‘newly industrialising countries’ like Mexico, Argentina and Brazil where labour costs were much lower, giving rise to phenomena like the Mexican maquiladoras where low-skilled, low-paid workers assembled products mainly for the US economy.
The flight of capital, and therefore of jobs, undermined the power of workers in traditional centres of militancy and enabled the bourgeoisie to use the threat of factory closures and unemployment to force through restructuring measures, cut wages and slash spending on social welfare.
The restructuring of capitalist production, by drastically cutting productive capacity and increasing the rate of exploitation, enabled a temporary recovery of profitability and an acceleration of production from 1983.
8. The bourgeois counter-offensive in the 1980s led to a decisive shift in the balance of power between the classes
1980 proved to be the high point in the upsurge of class struggle. This year saw the mass strike in Poland - the most important workers' struggle since the revolutionary wave of 1917-21. But with the Polish workers successfully isolated the bourgeoisie went onto the offensive.
Two struggles in particular at the start of the decade acted as test cases for the bourgeoisie's new strategy:
* the steelworkers’ strike in the UK – until the 1984-5 miners’ strike the largest in UK post-war history – ends in a pay agreement but the Tory government pushes through a ruthless rationalisation programme with plant closures and the loss of over 20,000 jobs. Total employment in the industry almost halves between 1979 and 1981. This defeat prepares the ground for the crushing defeat of the miners.
* the air traffic controllers’ strike in the USA ends in the Reagan government firing over 11,000 workers and decertifying the PATCO union, giving the go-ahead to major capitalist employers to take on militant workers; the three-year-long 1983 Arizona copper miners’ strike again results in the firing of militant workers and union decertification, becoming a symbol for the defeat of the organised American working class.
There were major workers’ struggles in the USA and western Europe in the 1980s. Some of the most significant of these - like the UK miners’ strike (1984-5) and printworkers' strike (1986) and the German steelworkers’ struggle (1987-8) - were carefully planned and prepared for in advance by the bourgeoisie as part of its strategy to defeat key sectors of militant workers and cut productive capacity. These struggles in traditional centres of working class militancy showed enormous combativity but ended in decisive defeats followed by plant closures and major job losses.
Other important struggles - like the national strike of public sector workers in Belgium (1983) and the general strike in Denmark (1985) - began as spontaneous reactions against an unprepared bourgeoisie. Some - like the struggles in Italy (1987) - displayed a real capacity for self-organisation through general assemblies and strike committees. But all these struggles took place in the context of a conscious capitalist strategy at the level of the US bloc to close factories and cut jobs to reduce productive capacity.
Faced with soaring unemployment rates, and unable to politicise its struggle to challenge the capitalist logic of the attacks, the working class was forced increasingly onto the defensive. Despite continued struggles even after the decisive defeat of key sectors - Britain in 1988 for example saw strikes by car workers, hospital workers, public service workers and teachers - the bourgeoisie was able to keep them isolated and contained using the unions.
9. The bourgeois counter-offensive did not end in 1989
The restructuring of capitalist production was by its nature a long-term strategy whose full effects were not seen until the 1990s. In particular:
- the growth of part-time and casual work, temporary and zero-hours contracts, precarious working, the 'gig economy', etc;
- the development and application of computing and communications technology, the growth of the internet, etc, in more and more sectors;
- above all the spectacular growth of the East Asian economies as a result of the shift of capital from the former industrial heartlands.
But there is a direct link between the defeats of key sectors of workers in the 1980s and the full emergence of what has become known as globalisation and neoliberalism, whose goals were always to achieve a decisive shift in the balance of power between the classes. The re-composition of the working class in the capitalist heartlands and the tendency towards the loss of its identity as a class, was a direct result of the defeats prepared and planned by the bourgeoisie at the start of the 1980s; for example in Britain the massive closures of pits and the consequent devastation of the traditional mining communities in the 1990s was only possible because of the defeat of the 1984-5 miners' strike, ruthlessly planned and prepared for by the British bourgeoisie from the end of the 1970s.
A future text will examine the specific impact of the fall of the Stalinist regimes in 1989 and the implications for the class struggle of the collapse of the blocs.
Mark Hayes
January 2021
References
[1] Gilles Dauvé & Karl Nesic, Whither the world, 2002.
[2] One account of what happened at FIAT describes how by 1980 “not only had the workerist component of the Italian far left been destroyed as a political force, but a generation of FIAT workplace activists with it … 'Shop-floor radicalism at Fiat was not so much absorbed or defeated as torn out by the roots' … With hindsight, the path of management's strategy can be mapped clearly: the criminalisation of the 61 [workplace militants dismissed for their activities] …the shutting of new recruitment; the creeping retrenchments which removed 20 workers a day for absenteeism; finally, the big push for the 'temporary' layoff of 25,000 staff.” (Steve Wright, Storming Heaven: Class Composition and Struggle in Italian Autonomist Marxism, Pluto Press, 2002, p.221).
Main sources
John Holloway, The Abyss Opens: The rise and fall of Keynesianism, n.d., libcom library.
"EMUs and the class war", Aufheben no. 1, 1992.
Globalisation: Origins-History-Analysis-Resistance, Treason Press, 2002 - a good general introduction to this subject.
Leo Panitch and Sam Gindin, “Global capitalism and American empire”, Socialist Register, 2004.
“Economic crisis Thirty years of the open crisis of capitalism", Parts II and III, International Review nos. 97 & 98, 1999.
"Capitals against capitalism", Internationalist Communist no. 18, 1996.
“Globalisation and imperialism”, Internationalist Communist no. 16, 1997.
“On Class Composition and Recomposition in the Globalisation of Capital”, Revolutionary Perspectives no. 28, 2003.
"Is capitalism finished?", Revolutionary Perspectives no. 48, 2008.