As labour’s share in the benefits of improved production is shrinking some commentators warn that “if you have economic advance without social inclusion, you have an accident waiting to happen.
In especially the EU the core response of governments and international institutions like the International Monetary Fund (IMF), World Bank (WB), European Central Bank (ECB) and EU parliament has to date been to enforce public-sector austerity measures. There is however, a growing perception among the public and some analysts that austerity comes at the expense of the working and middle classes and bypasses those who caused the crisis in the first instance.
The chronic political and social upheaval in many parts of the world is suggesting that the situation might be building to a breaking point, which could see a total overhaul of the power relationships between labour and capital and the manner in which production is presently organised.
In South Africa it is increasingly becoming clear that mere economic growth and improved productivity is not enough to ensure medium-to-long-term stability.
At a recent The Insiders event Dr Adrian Saville, chief investment officer at Cannon Asset Managers said that South Africa exhibits an attribute that is described as jobless growth. Data going back to the mid-1980s suggests that when the South African economy does grow, it does so with the same workforce.
“We are very good at building increasingly productive workers, but we don’t complement economic growth with job growth,” he said.
Elias Masilela, chief executive officer, Public Investment Corporation, said at the same occasion that South Africa is faced with structural imbalances that cannot be resolved in the short-term. Society needs to start taking a long-term view.
On the European front Andreas Bieler, Professor of Political Economy at the University of Nottingham and author of the book Global Restructuring, Labour and the Challenges for Transnational Solidarity, writes: “As part of bail-outs, many private banks have been nationalised, as for example the Royal Bank of Scotland in the UK. However, they have been allowed to continue operating as if they were private banks. Little state direction has been imposed. It will be important to move beyond nationalisation towards the socialisation of banks to ensure that banks actually operate according to the needs of society.
“Such a step would contribute directly to changing the balance of power in society in favour of labour.
“In the long run, however, even the change in power balance between capital and labour will not be enough. Capitalist exploitation is rooted in the way the social relations of production are set up around wage-labour and the private ownership of the means of production. Exploitation, therefore, can only be overcome if the manner in which production is organised is being changed itself.”
Bieler argues that the policy of austerity has weakened the position of labour as a counter-balance to the power of capital in society. Across the EU, employers abuse the crisis to cut back workers’ post-war gains. The crisis provides capital with the rationale to justify cuts they would otherwise be unable to implement.
In response to the crisis he writes that it is “often argued in the media that citizens of richer countries would now have to pay for citizens of indebted countries. Cultural arguments of apparently 'lazy Greek' workers as the cause of the crisis are put forward.
“Nevertheless, this is clearly not the case. Greek workers are among those who work the longest hours in Europe. In any case, it is not the Greek, Portuguese, Irish or Cypriot citizens and their health and education systems which are being rescued.
It is banks who organised the lending of super profits to peripheral countries, which are exposed to private and national debt in these countries.”
Bieler notes that even Europe’s star economic performer, Germany “has been unrelenting in squeezing its own workers ... During the last two decades, the most powerful economy of the eurozone has produced the lowest increases in nominal labour costs, while its workers have systematically lost share of output.”
In a recent opinion piece on the political climate in Europe, Britain’s The Telegraph warns: “Domestic political limits to austerity are becoming evident. The electorates of countries in the grip of austerity are close to breaking point.”
The big question is whether political and economic leaders around the globe, and in South Africa, will be able to manage the transition to a seemingly inevitable new socio-political and economic dispensation or whether it will first descend into the chaos called a “revolution".