Endurance Games: Reassessing the mass strike based on recent experiences in France

Joint worker and student protest against the First Employment Contract in Rennes April 4 2006

Lisbeth Latham

Dwindling rates of industrial action - particularly in advanced capitalist countries- are often cited as evidence of the labour movement’s global decline. Yet the value of industrial action, and particularly mass strikes, are often grossly oversimplified. ‘If we strike, we will win’ may galvanise workers temporarily, but it belies the complex nature of social movements, where a willingness to struggle is only part of the formula necessary for victory. The complexity of this reality can be seen in the experiences of the contemporary French labour movement. In comparison to movements in other advanced capitalist countries, the French movement is often seen as incredibly militant and powerful. Yet, since the global financial crisis in 2008, it has suffered a series of defeats and has found it increasingly difficult to mobilise to the same extent as before. This is not to say that the French movement is any less heroic than it was in the past, but that the balance of class forces and the confidence of the French popular classes has declined. This has exposed limitations in the mass strike as an industrial tactic when it is not paired with a broader perspective of victory; winning requires not only mass involvement but also a determination to maintain struggle at times in the face of defeat.

The Mass Strike
One of the most influential works on strikes is The Mass Strike, the Political Party and the Trade Unions written by Rosa Luxemburg in 1906[1]. She sought to explore the experiences of Russia's failed 1905 revolution and draw lessons for the broader European social democratic movement. Prior to the pamphlet’s publication, social democracy had been highly critical of mass strikes, seeing them as an anarchist fantasy, as Luxemburg put it

“the theory of the general strike as a means of inaugurating the social revolution, in contradistinction to the daily political struggle of the working-class – and exhausts itself in the following simple dilemma: either the proletariat as a whole are not yet in possession of the powerful organisation and financial resources required, in which case they cannot carry through the general strike; or they are already sufficiently well organised, in which case they do not need the general strike”[2]

Contrary to this view Luxemburg argued:

“the mass strike in Russia has been realised not as means of evading the political struggle of the working-class, and especially of parliamentarism, not as a means of jumping suddenly into the social revolution by means of a theatrical coup, but as a means, firstly, of creating for the proletariat the conditions of the daily political struggle and especially of parliamentarism. The revolutionary struggle in Russia, in which mass strikes are the most important weapon, is, by the working people, and above all by the proletariat, conducted for those political rights and conditions whose necessity and importance in the struggle for the emancipation of the working-class”[3].

The subsequent role of mass strike movements in creating legitimation crises for the capitalist class, blunting their offensive, and creating the impetus for revolutions has vindicated Luxemburg’s position[4]. At the same time mass strikes, like other tactics, have their limitations and even large mass strikes, as demonstrated by Russia in 1905, do not guarantee the successful achievement of a movement’s objectives.

The recent movements in France in defence of pensions and against labour market reforms are important experiences in demonstrating both the strengths and weaknesses of the mass strike as a political tactic.

Leading into the global financial crisis the French working class had achieved a series of victories against government attacks. Most notably: 

• the strike wave against attacks on the public sector attacks in 1995 
• the movement leading up to the defeat of the referendum on endorsing the Lisbon treaty in 2005; and
• the mass movement lead by students against the contrat première embauche (First Employment Contact - CPE) legislation in 2006[5]

At the same time the French organised left was in a process of breakdown and realignment. The Parti Communiste Francais (PCF) , once the hegemonic force on the French left saw its vote in presidential elections fall from 15.35% % in 1981 to 3.37% in 2002. As its old red-belt strongholds became locations of strength for the Front Nationale. deindustrialisation under successive Parti Socialiste (PS) -with the PCF as a minority partner- shattered France’s traditional heavy industrial areas[7]. The impact on the working class in these areas was devastating. Consequently, the PCF’s parliamentary representation became increasingly dependent on a non-aggression pact with the PS, who did not run candidates against sitting PCF MPs. This dependent relationship between the PCF and the PS was to become a key point of conflict in discussions regarding joint far-left candidates, with the Ligue Communiste Revolutionnaire (LCR) and subsequently the Nouveau Parti Anticapitaliste setting down a priori independence from the PS as a key basis for any discussions about united left electoral tickets[8].

It was not just the PCF who was negatively impacted; the PS suffered the indignity of running third in the 2002 presidential elections behind Jacques Chirac and Front Nationale’s (National Front - FN) Jean-Marie Le Pen[9]. Whilst some blamed this embarrassment on the shock results of the Trotskyist LCR (4.25%) and Lutte Ouvrière (5.72%) candidates, it still posed the question of why people weren’t voting for the PS. It also failed to explain why workers were voting for small far-left parties instead, or even abstaining from voting at all. This put the left in the position of having to respond to a presidential run-off between the right and the far-right - an unenviable position which was repeated in 2017 with the runoff between Macron and Marine Le Pen.

2009 Post GFC Movement
Triggered by the mass defaulting of subprime mortgages in the US economy and exacerbated by the failure of the mortgage backed securities which underwrote the loans, the GFC of 2007-2008 spread like an infection through the global financial sector. Yet as governments scrambled to bailout high finance, they also sought to shift the cost onto working people.[10]

In France this response was met with mass resistance. The intersyndicale (an informal alliance of union confederations at a national level) called for mass mobilisations against the policies of Sarkozy and the Fillon government. Their demands included: Increases in the minimum wage and payments to the unemployed and pensioners; Increased social spending on public housing; Action to reduce job losses including bans on redundancies at profitable companies; Reversal of the tax cuts given to the rich at the start of the crisis; Reversal of job losses and restructuring of the public sector[11]

The intersyndicale achieved a series of mass mobilisations throughout 2009, the largest of which was the general strike of March 19 which drew over 3 million people[12]. Despite these mobilisations the coalition was unable to force any real concessions from the government and, as they progressed, the mobilisations lost impetus.

This development was not a surprise to all the union leaderships. One of France’s most militant union confederations, the openly anti-capitalist Solidaires, consistently argued for a need to go beyond individual days of mobilisation. Solidaires predicted that, however successful, individual days of mobilisation alone would not be enough to steer the government from its well-worn course of protecting capital at the expense of working people. Instead, Solidaires argued for the need to build towards a renewable general strike[13]. As evidence of the effectiveness of this approach they pointed to the successful strikes by workers in the French colonies of Martinique and Guadeloupe from January to March of that year. Although Solidaires leadership did concede under pressure from other unions that capacity for such action did not exist, they argued that the work still needed to be done. Affirming the movement’s need and capacity to mobilise on both a mass and ongoing basis would be more productive than simply acknowledging and accepting its inadequacies, they felt[14].

As 2009 continued the movement declined. By 13 June the once three million-strong movement had plummeted to a mere 150, 000 and was essentially over, having achieved very little in the way of concessions. At the same time, the state was preparing a new wave of attacks on working people, this time in the form of an assault on France’s pension system.

Joint mobilisation against the attack on France's Pension System 2010

2010 Pension Struggle
In early 2010, the Fillon government announced that it was seeking to change France’s pension system. The proposed changes included raising the retirement age and increasing workers’ contributions to the social security scheme - effectively requiring workers to work more hours over a greater duration of their lifetimes.

In the wake of this announcement, the Intersyndicale resumed meeting in earnest. Their concerns were well-founded. Though Fillon’s attack on the pension system threatened to disadvantage all workers, its impacts would be felt most acutely by women, significantly reducing the number of women expected to qualify for a full pension and exacerbating the problem of French women retiring into poverty.

From the outset, the unions were divided in their view of the objectives of the movement. The class-struggle unions (combat syndicales), whose membership includes Solidaires (Solidarity), Force Ouvrière (Workers Force - FO), and large sections of both the Federation Syndicale Unitaire (FSU) and Confédération Générale du Travail (CGT) wanted the proposals to be totally withdrawn. The more conservative unions, most notably the Confédération française démocratique du travail (French Confederation of Democratic Workers - CFDT) and Confédération Française des Travailleurs Chrétiens (French Confederation of Christian Workers - CFTC) were more conciliatory, seeking greater consultation with the government regarding the changes. Yet despite these differences, there was eventually a basis for a common united movement involving France’s eight main union confederations and federations - although the early movement involved just five[15].

Initially, the 2010 movement was far smaller than the previous years with the March protests reaching only 800, 000 nationally. These disappointing numbers inevitably gave rise to commentary that the defeat of 2009 had undermined the mobilising capacity of the movement. However, as the year progressed the movement began to grow and the pace of mobilisations increased. By 24 June mobilisations had reached 1.92 million. Numbers continued to grow as the legislation worked its way through France’s legislative processes in September and October. Ultimately, there were seven mobilisations, all exceeding two million people and peaking at 3.5 million. However, the total number of people involved in the movement is likely to have been far greater[16].

Solidaires Adverstisment calling for a genderal strike on September 9, 2010

Significantly, in a number of industries the days of mobilisation were linked by strike action. Initially these renewable strikes began in France’s oil refineries - triggered by a struggle around Total’s plans to close its Dunkirk refinery[17]. Yet the movement also spread to other sectors. This spread was facilitated, in part, by a decision within the intersyndicale to allow industrial action in workplaces, and at the municipal level, to be initiated by general assemblies of workers at those levels. This meant that, in those sectors and regions where the more militant unions had greater influence, they were able to link protracted strikes to the mobilisations, which were then called and supported by all unions between the punctuating mass mobilisations. Under France’s Labour Code and constitution, if one union in a workplace issues a strike notice then any worker can participate regardless of their union affiliation. While there were a number of spaces where renewable strikes were in effect, the most important of these was in the oil refineries whose closure massively disrupted fuel supplies across France[18].

Despite the size and escalating character of the movement the government pushed ahead with passing the legislation. In the wake of the passing of the legislation in November, there was one more joint mass mobilisation on November 23. The interior ministry estimated the protests size at 52, 000 and the unions did not announce a size estimate. This small mobilisation indicated that the movement had effectively collapsed. The more conservative unions withdrew from the campaign on the promise that the legislation, whose impact was not immediate but delayed, could be defeated via the election of a PS government in 2012.Those workers who remained on strike - most notably the oil refinery workers - became increasingly isolated as the movement collapsed. In Marseille, a city controlled by the PS, municipal workers were forced back to work using legislation introduced by the de Vilipin government the year before[19]. This legislation, which guaranteed minimum essential services during strikes, was anti-worker by design and undermined a number localised strikes that were holding out against the collapse of the broader movement

 

Mobilisation in Marseille March 18, 2006

Movement against the First Employment Contract
In 2006, the de Villipin government had sought to introduce the CPE, a change in France’s employment laws which would have weakened the rights of workers under the age of 26, including allowing employers to dismiss young workers aged between 18-26 without notice or reason during their first two years of employment[20]. By targeting just younger workers, the de Villepin government hoped that by focusing on one section of the workforce they could divide and limit any potential opposition movement.

Initially this was the case, as there was limited united resistance by the union confederations[21]. However, despite the lack of leadership from workers’ unions, high school and university students, primarily organised via the Union Nationale des Étudiants de France (National Union of Students of France), Fédération indépendante et démocratique lycéenne (Independent and Democratic High School Federation), and the Union Nationale Lycéenne (National Union of Secondary Students) began their own mass mobilisations - shutting down schools and universities and driving mass mobilisations of students. These student mobilisations gave impetus for militants within the union confederations to push to support the student protests[22]. Between the rising peaks of mass mobilisations, student pursued a broader goal of disrupting the economy via their own collective actions and concentrated on building alliances with workers to support and exacerbate the disruption. By March 2006, 68 of France’s 89 universities were either occupied or on strike with many high schools across France barricaded shut by striking students[24]. More spectacular were the student occupations of rail lines or the successful blocking of Airbus airliners being transported from manufacturing plants[25].

As inspiring as the movement was, it was not significantly bigger or more disruptive than the 2010 movement. What really differentiated the 2006 movement against the CPE from the 2010 movement to defend pensions was that when the CPE was passed, the movement continued. In passing the legislation in 2006, the de Villepin government gambled that passing of the legislation would dissipate the movement and remove the threat to French state and capital[26]. When the movement continued despite the legislation passing the threat effectively expanded with no hope that it would decline in the short-term. In response to the movement’s determination, the government retreated and the legislation, despite passing, became a dead letter[27].

The lesson to be drawn from comparing the events of 2006 and 2010 is not that mass movements are no longer capable of winning, or that strikes are no longer crucial to achieving victory in industrial and political struggles. It is instead that these struggles are ultimately battles of will and endurance. What changed between 2006 and 2010 was not the capacity of the movement to mobilise- indeed the 2010 movement was arguably larger in size than the 2006 mobilisations. No, what differed between them was the determination of the ruling class to persist with their attacks on working people and, even more crucially, the ability in 2006 of the more radical sections of the movement, most notably the student unions, to cohere and mobilise after the passing of the legislation. It is not sufficient for our movements to be massive or powerful. In order to be victorious,the will and determination of workers must be strong enough to outlast that of capital and its governments. Escalating and disruptive action is thus most effective when deployed as a means of undermining capital’s confidence and endurance. The continuation of the mass movement of 2006 and consequent disruption of the economy cast the gamble made by the right to push forward with legislation as a grievous error, creating the fear that the movement would not stop. By contrast in 2010, the government’s bet proved correct, the movement did collapse and the state and capital could both be confident not only to maintain that round of attacks but contemplate and implant further attacks on working people.

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1 Luxemburg, R. 1906. The mass strike, the political party, and the trade unions. Marxist Internet 
Archive. https://www.marxists.org/archive/luxemburg/1906/mass-strike/.
2 ibid.
3 ibid.
4 Haug, F., Wilde, F., and Heidenreich, F. 2018. “Mass strike.” Rosa-Luxemburg-Stiftung. https://www.rosalux.de/publikation/id/43671/mass-strike?cHash=4dc514bc263b77a899f91e9878b10683.
5 Cézard, Yann. 2020. “1995-2003-2010: lessons from three large-scale mobilizations.” International Viewpoint. https://internationalviewpoint.org/spip.php?article6347.
   Carasso, L. 2005. “E After the success of the "no from the left."” International Viewpoint. https://internationalviewpoint.org/spip.php?article845.
   Carasso, L. 2006. “A major social and solitical crisis.” International Viewpoint. https://internationalviewpoint.org/spip.php?article1070.
6 Amable, B. and Palombarini, S. 2021. The last neoliberal: Macron and the origins of France's political crisis. London: Verso.
7 Jacobin. 2016. “When the workers were communists.” Jacobin. https://www.jacobinmag.com/2016/10/when-the-workers-were-communists/.
8 Perez, Benito. 2007. “The presidential campaign is rotting French political life.” International Viewpoint. https://internationalviewpoint.org/spip.php?article1214.
   Ligue Communiste Revolutionaire. 2007. “For the foundation of a new anti-capitalist party.” International Viewpoint. https://internationalviewpoint.org/spip.php?article1290.
   Ligue Communiste Revolutionaire. 2008. “Address for a new anticapitalist party.” International Viewpoint. https://internationalviewpoint.org/spip.php?article1422.
9 Henley, J. 2002. “French poll result seen as catastrophe.” DAWN. https://www.dawn.com/news/29700/french-poll-result-seen-as-catastrophe.
10 Mirowski, P. 2014. Never let a serious crisis go to waste: How neoliberalism survived the financial meltdown. London: Verso.
11 Latham, L. 2009a. “French unions ready for a general strike on March 19.” Revitalising Labour. https://revitalisinglabour.blogspot.com/2009/03/french-unions-ready-for-general-strike.html.
12 Latham, L. 2009b. “French unions plan campaign against financial crisis Following 3 Million strong general strike.” Revitalising Labour. https://revitalisinglabour.blogspot.com/2009/03/french-union-plan-campaign-following-3.html.
13 National Burea of the Trade Union Solidaires. 2009. “Together let us make the assessment - To be stronger tomorrow.” Revitalising Labour. https://revitalisinglabour.blogspot.com/2009/09/solidaires-assessment-of-french.html.
14 ibid.
15 Latham, L. 2010a. “Thousands of French workers march to defend pensions.” Revitalising Labour. https://revitalisinglabour.blogspot.com/2010/03/thousands-of-french-workers-march-to.html.
16 ibid
Latham, L. 2010b. “French workers mobilise to defend pensions.” Revitalising Labour. https://revitalisinglabour.blogspot.com/2010/06/french-workers-mobilise-to-defend.html.
Latham, L. 2010c. “Millions of workers march to defend pensions in France.” Revitalising Labour. https://revitalisinglabour.blogspot.com/2010/09/millions-of-workers-march-to-defend.html.
Latham, L. 2010d. “French workers fight back against pension attack.” Revitalising Labour. https://revitalisinglabour.blogspot.com/2010/10/french-workers-fight-back-against.html.
Trade Union Solidaires. 2010. “Solidaires - Pensions: Win by our determination!” Revitalising Labour. https://revitalisinglabour.blogspot.com/2010/10/solidaires-pensions-win-by-our.html.
17 Latham, L. 2010e. “French Senate votes to raise retirement age as unions prepare for a day of strikes.” Revitalising Labour. https://revitalisinglabour.blogspot.com/2010/10/french-senate-votes-to-raise-retirement.html.
18 Andrews, W. and Vandoorne, S. 2010. “Fuel imports into France surge as protests imperil transportation.” CNN. http://edition.cnn.com/2010/WORLD/europe/10/18/france.strikes.shortage/index.html.
19 Latham, L. 2010f. “France: Sarkozy enacts pensions law as mass mobilisations continue.” Revitalising Labour. https://revitalisinglabour.blogspot.com/2010/11/france-sarkozy-enacts-pensions-law-as.html.
    Smith, M. 2010. “France: Not victorious, but not defeated.” Links: International Journal of Socialist Renewal. http://links.org.au/node/2034.
20 Steven. 2006. “The French movement against the CPE, 2006.” libcom. https://libcom.org/blog/short-history-cpe-protests-france.
21 Cézard op cit.
22 Cézard op cit.
     Steven op cit
     Périn, M. 2006. “Inside the occupation movement: ‘Together we are recreating our university.’” Socialist Worker, March 18, 2006. https://socialistworker.co.uk/art/8300/Inside+the+occupation+movement%3A+Together+we+are+recreating+our+university.
23 Smith, M. 2006a. “Student movement puts government on the defensive.” International Viewpoint. https://internationalviewpoint.org/spip.php?article996.
Wolfreys, J. 2006. “Daniel Bensaïd: ‘This movement is directly based on a social question.’” Socialist Worker. https://socialistworker.co.uk/art/8364/Daniel+Bensa%C3%AFd%3A+This+movement+is+directly+based+on+a+social+question.
24 Duthu, M. 2006. “French workers and youth unite against the First Employment Contract: No to all precarious contracts.” In Defence of Marxism. https://www.marxist.com/french-workers-youth-unite160306.htm.
Smith, M. 2006b. “Anti-labour law movement enters key stage.” International Viewpoint. https://internationalviewpoint.org/spip.php?article1000.
25 Chrisafis, A. 2006. “Chirac backs down and scraps youth job law.” The Guardian, April 11, 2006. https://www.theguardian.com/world/2006/apr/11/france.angeliquechrisafis.
26 ibid.
     Cézard op cit.
     Steven op cit.
27 Cézard op cit.

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Misplaced Sympathies: Anti-Lockdown Protests Undermine Social Solidarity

Lisbeth Latham

As more Australians enter lockdown in response to the spread of COVID-19 there has been an associated rise in protests against lockdowns and other public health measures designed to curb the spread of the virus. These protests are not a new phenomenon but have been occurring since the beginning of the pandemic. Although initially condemned, in Australia at least, there are now attempts to paint these protests in a sympathetic light or even as somehow progressive. According to these commentators, the protests, although misguided, are really a response to the state’s failure to deliver sufficient support to working people. Yet while financial hardship may be a motivating factor for some participants, remedying financial stress is by no means the objective of these rallies. Instead, the protests rely heavily on militant individualism and opposition to state limitations on behavior which are justified by appealing to a range of interlocking conspiracies that question the reality of the pandemic and the motivations for the various state responses to it.

In most countries, the early protests against lockdown and other public health measures aimed at limiting the spread of COVID. This was particularly aimed at the compulsory wearing of masks and the limiting of movement. The right-wing character was made clear not just by the groups pushing heavily within this framework - such as in the US militias, and other far-right currents such as the Proud Boys, and various Christian patriot groups, but the language that was used to justify and legitimise refusal to comply. These were heavily drawn from highly individualistic, right-wing libertarian sources, such as sovereign citizenship etc. which apart from denying the right of states to govern rely heavily on completely nonsensical quotes of non-existent legal arguments regarding the Magna Carta and other historical and totally irrelevant documents. These mobilisations were often also pushed by sections of capital who did not want to forfeit their right to make a profit at the cost of saving lives.

One of the numerous anti-lockdown advertisements published by Clive Palmer in major Australian newspapers.

In July of this year, the protests in Australia were bigger than earlier protests. This has lead to some on the left searching for a basis for this growth, the answer that a number have come to the conclusion that the driver is the shift in the level of financial support provided by the government to workers in lockdown and as such the protests are really, to paraphrase Marx, the sigh of the oppressed. While there is some appeal in being able to explain the growth in the protests as simply the growth in anger at financial difficulties brought on by the pandemic, you do need to be able to establish more than a correlation to demonstrate causation particularly if we are not descending into vulgar forms of materialism and accelerationism. However, the advocates for a position that this is a prime driver provide limited if any evidence. Tom Tanuki, in an article in the Independent Australian, whilst acknowledging that it is:

“a ’big tent’ conspiracist movement that houses discordant ideas and sometimes leaderless factions. It’s given direction by a ruling caste of portrait-video-filming figureheads who often scrap with each other for viral supremacy. The attention-seekers among them get a sugar rush of shares, the grifters get lots of money and the political careerists try to craft a future voting bloc.”

Despite this Tanuki plays down the significance of this reality and instead posits the movement, at least in Sydney, as “left” based on the participation of the working-class and sections of the Lebanese community from Sydney’s South West - however, no evidence is provided to support any of these claims. Christopher Knaus and Michael McGowan writing in the Guardian outline the global far-right network that has been seeking to build the anti-lockdown movement globally and notes that at least some of the organisers in Australia are embedded in these global far-right networks. However, Knaus and McGowan also cite Josh Roose, a senior research fellow specialising in extremism at Deakin University, as suggesting:

“While there were elements of far-right rhetoric among the protestors, what they actually shared was a level of marginalisation and distrust in authority.
“There are some similarities and commonalities to the far right in terms of content but these protests are not driven by the far-right per se,
“What immediately distinguishes these sorts of protest groups from the far right is that they’re highly multicultural and they’re made up not just of angry men at a patriot rally but also women.
“In both Melbourne and Sydney the people and areas being represented are the areas that have been hit particularly hard by the pandemic. There’s also issues here with the cultures and communities often have a deep-seated distrust of government, often for good reason.”

Again no evidence is provided to support either the observation or the conclusion. The idea that the presence of workers, people of colour, or women, may not fit with some people’s stereotypes of the far-right, but all of these identities are heterogeneous and historically they have all been sources of recruitment, particularly amongst more marginalised sections of communities, for the far-right even if our image of the far-right are young white men.

In questioning this argument I am not saying that financial hardship is not a factor. There would undoubtedly be people at the protest who have suffered financially - moreover, there are many people experiencing severe financial hardship due to the inadequacy of state and Commonwealth financial support. For some, this experience may have been a driver for their participation. Whether it is a driver of mobilisations, we should be raising demands not only to increase the level of financial support to workers, the self-employed, those reliant on welfare payments, and small business. Such financial support policies need to be consistent and locked in to provide greater certainty for people in the coming months. Our demands need to go beyond simply demanding the reinstating JobKeeper, and the COVID support supplement, but addressing the significant flaws in JobKeeper, many of which were entirely by the design of the Morrison government and for the COVID support supplement to be incorporated into all government pensions.

In saying this, I am also saying those advocating that financial hardship as the primary driver, or even a significant driver, need evidence that is the case. For me, a key basis for judging motivations of mobilisations are the public justifications for the mobilisations and the demands raised spontaneously within the participants. On this, the evidence does not suggest that seeking to address financial hardship is a key driver. It does not feature highly in the calls to action or with the homemade signs. Instead, we see calls for “freedom” and around the need for an end to lockdowns and other social distancing mechanisms, such as masks, and rejections of vaccines - which are core issues of this movement since its initial development.

Also, the growth and development of the movement internationally while not uniform, suggests it is growing irrespective of the financial and social distancing regulations which are actually in place in any given city or country. So rallies have occurred in cities without lockdown or provisions such as compulsory masking in place, although in these cities the protests tend to be smaller - which you would expect as the perceived threat is not present.

This does beg the question as to why there has been a growth in the anti-lockdown movement? Well, I don’t think it is for a singular reason. One factor is that there has been significant disinformation spread regarding both the virus and the various mitigation measures, including masks and vaccines. This is highlighted by the recent seven-day suspension of Sky News Australia from YouTube over the spreading of Covid misinformation. As the distress of lockdown and other limits on movement have built, it is understandable that some people who are experiencing extreme emotional distress would find the idea that that distress is both unnecessary but also can be ended simply by ending lockdowns. This is particularly the case in a country such as Australia where the health impact of COVID has been more limited - it is easier to imagine proceeding as normal without the fear that infections could explode to the levels experienced in other countries. This is contributed to discussions in both mainstream media and on social which talks about the Australian experience without contextualising it in the global context: at the same time the discussion also tends to discuss the Australian governmental response as far more repressive and restrictive than other states - this is particularly notable in discussions of Australia’s border policy as being unique in closing and limiting travel in and out of the country - which a review of sites such as the International Air Transport Association’s COVID-19 Travel Regulations Map - it is clear that Australia is not alone in having travel restrictions in place, nor does it currently have the harshest restrictions internationally.

Even in countries where infections and deaths have been much higher, most of the experience has been isolated to sections of the community particularly health care workers, and those who have experienced close family and friends become extremely sick and die. This is reflected in experiences in a number of countries of hospitals being targeted by anti-lockdown/COVID sceptical individuals as being part of a big lie to justify incursions on civil liberties.

The problem with identifying the drivers of protests is that they are not singular. However, it is clear that the process of the pandemic and associated public health measures have been extremely distressing for the vast majority of society. This is not a real shock, particularly when we consider the lack of certainty faced by many individuals, will they have work, will they be able to go see friends, will they be able to see family or travel. Uncertainty is highly stressful. It makes us feel anxious and that we have no power, or ability to control our own lives. It should be no surprise that psychological distress would help to create a fertile medium for conspiracy theories and anti-science denial to grow and take root. These ideas provide certainty, against a reality of a virus that might kill you and your loved ones - a counter reality where there is no virus and the restrictions are simply part of a conspiracy by the powerful to control us, can be appealing on many levels. That detachment from reality would not necessarily be a problem if it weren’t for the reality that rejecting the public measures increases the risk of exposure of everyone to a highly infectious virus that not only kills but causes long-term health problems in many of those who catch it.

These dynamics can only get worse as the emotional wear of the pandemic builds.

So what is the answer? While we must always come from a position of empathy, and understand that many participants in the protests are coming in situations of significant and understandable distress - I don’t think that empathy should let us fall into a position of accepting their arguments and motivations as being legitimate. These actions are aimed at undermining measures that protect public health - whilst people should not be treated with excessive or unreasonable force - the protests do need to be limited and prevented as they are aimed at disrupting the limits on social distancing needed to suppress the virus and save the lives and health of the broader community. Our efforts to maintain support for public health measures need to be premised on social solidarity and the idea that through some individual pain it is possible to reduce the severity of the impact on any individual - which means that the pain does need to be shared across the community - the idea of locking down working-class communities and communities of colour in order to enable rich suburbs to go on as if nothing is happening is unconscionable and reasonably erodes the idea that we are trying to protect everyone.

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Did the Accord Cause Australian Neoliberalism?

Bob Hawke and Paul Keating key architects of Australian Neoliberalism

Lisbeth Latham

Reading the publications of the Australian far-left has seen a sharp rise in the discussion of the Prices and Wages Accord and attempts to relate that experience to the contemporary Australian union movement’s attempts to respond to the double crisis of the COVID pandemic and the associated financial crisis[1]. While there is much to be criticised in the Accord experience - these left critiques tend to see the Accord as a singular process, rather than the complex dynamic interaction with the unfolding not only of the Accord itself but the broader dynamics of Australian political and economic life in the period of the 1980s and 1990s. Many of these left critiques oversimplify and overplay the level of the intentionality of the leaderships of the labour movement in the implementation of the Accord and posit it as the key mechanism by which neoliberalism was established within Australian society. In this article, I aim to outline: 

• the circumstances that the labour movement found itself in that lead to the Accord project; 
• the changing character of the Accord over the period of its implementation; 
• the internal processes of control and discipline within the labour movement to enable the Accord to be implemented and maintained and the impact of these on democracy within the labour movement; 
• the impact of the Accord on working people; and 
• the impact of the Accord experience on the capacity of the Union movement to organise and respond to attacks from the state and capital.

Inflation and unemployment crisis
In the early 1980s the Australian economy, like other advanced capitalist economies, entered into recession. The Fraser government responded to the recession by seeking to impose wage restraint by using the centralised wage-fixing system to cut real wages. In 1981, in response, unions, most notably the Amalgamated Metal Workers and Shipwrights Union (AMWSU)[2], launched a campaign to achieve a 35-hour week with no loss in pay - in order to maintain workers’ buying power and to create jobs by reducing working hours. This campaign was partially successful, the AMWSU, operating outside the arbitration system, won a pay rise of $20 per week and a reduction in the working week to 38-hours per week in 1981, with a further pay rise to be paid in the second increase of $14 in 1982, based on projected inflation for the next six months. These gains were based on a basis of the union agreeing to no further claims for twelve months[3].

In the wake of this victory, the crisis in the Australian economy deepened as the global economic crisis intensified driving down demand for consumer and capital goods. This downturn had already begun to be felt in Australia before the wage campaign, but the AMWSU had been protected from it initially due to residual demand for skilled workers.

In response to the crisis, manufacturing employers started to rapidly shed jobs, and about 90,000 workers were sacked. In the face of this assault, the AMWSU’s leaders abided by the “no-strike” agreements and did not take industrial action to try to protect jobs. At some shops, workers tried to secure jobs by agreeing to reduce their hours to a four-day week at four days’ wages[4].

This experience is now raised by the right as demonstrating the inevitable consequence of workers achieving wage rises [5]. Whilst, that conclusion is deeply wrong, and a fundamental misreading of the situation, this experience gave greater weight to the position adopted by the ALP in 1979 supporting the creation of an agreement with the union movement aimed at maintaining living standards that avoid either a wage breakout or hyperinflation[6]. The impetus for this position within the ALP had come from the period of hyperinflation during the Whitlam government (1972-1975). This was particularly the case within the AMWSU and other unions where members of the Communist Party of Australia were part of the leadership[7].

Stated objectives of the Accord
The initial objective of the Accord was to reduce unemployment and to hold inflation in check. This would be achieved by limiting inflation by restraining wages, while at the same time improving the standard of living of working people by boosting the “social wage” via expansion of government spending particularly around healthcare (Medicare), increased family payments and childcare. A major flaw of the Accord process was that whilst the system had mechanisms that effectively restrained wages, via a centralised wage-fixing system, there were no such restraints on capital regarding the setting of prices, leaving the system open to companies covering any rise in their costs via increasing prices, or just deciding to do so to boost profits. This limitation meant that understandably groups of workers, if not whole unions, were motivated to break out of the Accord in order to defend wages[8]

Control and discipline
The process of entering the Accord sparked immediate resistance within the labour movement. Most notably this was reflected in individual far-left individuals and organisations opposing the proposal. The Socialist Party of Australia (SPA)[9], which had a number of members who were elected officials in unions, most notably the Building Workers Industrial Union{10], Waterside Workers Federation, Seamen’s Union, and the Firemen and Deckhands' Union of New South Wales[11], publicly opposed the Accord and sought to direct their members who were union officials to oppose the Accord. These members revolted against the direction, arguing that it represented an attack on union democracy, splitting away to form the Association of Communist Unity (while some officials were expelled by the SPA for their refusal to follow party discipline, others simply resigned)12. While there are a range of reasons for this refusal to abide by party discipline, one factor was undoubtedly the reliance of these officials to their collaboration and alliances with officials from the CPA and the Labor left who supported the Accord. Brown has argued that these internal processes of control and discipline impacted on individual officials who had second thoughts regarding the Accord who could expect to be disendorsed and excluded from internal tickets if they did not tow the pro-Accord line[13].

Efforts to tie the movement to the Accord only intensified as the process continued. The Accord was posed as a necessary protection against the threat to the movement by the “new right” - in the form of the members of the Institute of Public Affairs and the HR Nicholls Society. This meant that those unions which sought to break from the Accord, were not just seen as revolting from the Accord, but risking the protection that the Accord was seen as offering the movement. So those unions that did revolt, such as the Confectionary workers[14], Builders Labourers Federation[15], and the Airline Pilots, not only faced aggressive and hostile employers, which included deregistration processes, strike-breaking, and the initiation of civil damages suits, but also were isolated, vilified, and raided by their “comrades” in rest of the union movement, including the Hawke Labour Government. Most notable was the deregistration of the BLF in the ACT, in NSW, and in Victoria[16].

How the Accord changed over the course of the process 

As much as it is tempting to discuss the Accord as a singular process, it changed considerably over the course of the 13 years it was in effect - with eight different Accords negotiated (although Accord Mark VIII was never actually implemented)[17]. Whilst the early Accords had wage-fixing aimed at addressing specific macroeconomic issues, such as inflation and unemployment, Accord Mark III, in 1987, introduced the concept of two-tier wage rises - with all workers automatically receiving the first tier of wage increases, and the second tier only being received subject to improvements in structural efficiency[18]. This shift both resulted in extremely uneven timing of when the second wage-rise was received, it marked a significant shift in the conceptualisation of the basis on which wage increases would occur, that they should be tied to demonstrated productivity increases beginning a process of Award restructuring.

As the Accord proceeded, a major justification for the need to maintain the Accord process, was to both hold off the introduction of enterprise bargaining (which was seen as a project of the new right) and to maintain the ALP government to prevent anti-union attacks that had been implemented by conservative governments globally – Peetz as argued that one of the major achievements of the Accord was precisely this delay. However, with the introduction of the Accord Mark VII in 1991, enterprise bargaining, that is negotiations on a company by company basis, rather than industry-wide arbitration and conciliation, was introduced[19]. While bargaining had always occurred within the Australian Industrial Relations system this process had always had a complex and integral relationship with the centralised systems around the Award System. The 1991 process, enshrined in the Industrial Relations Act, began to unravel this relationship. A process which has been deepened with the 1996 Workplace Relations Act, 2005 WorkChoices Act, and the 2008 Fair Work Act. Historically improvements achieved by militant unions in their better organised and more industrially strategic “hot shops”, most notably the AMWU, at the enterprise level could be leveraged and incorporated into the Awards via the state and federal industrial commissions. Enterprise bargaining began a process of severing this connection - which meant that militant unions and their members could only bargain for themselves in their local workplaces (albeit they have attempted to work around this via pattern bargaining which is now legally banned), rather than their actions to improve conditions serving as pacesetters for the conditions of all workers reinforcing individualism and breaking social solidarity between workers, which is such a central drive of the neoliberal project[20]. This process led to a tiering of working conditions based on the extent to which workers had access to enterprise bargaining, with those works reliant on the awards not only falling substantially behind on wages but in their broader working conditions through a combination of the successive award stripping by the Howard government and the achievements by workers and their unions within the EA system in adding and improving conditions.

Peetz has argued that the Accord process provided important protections to Australian unions in delaying conservative governments and their full-frontal assault on unions in Australia similar to what occurred in New Zealand as a consequence of the Bolger government’s attacks[21]. It is also arguable that the Accord process rather than protecting unions instead left them more vulnerable to the attacks when they came[22]. Whilst comparisons can be made to New Zealand and the devastation wreaked on the labour movement. A counter comparison can be made to the experience of the French labour movement which via ongoing resistance, including splits within the labour movement over responding to attacks by employers and governments[23]. This response meant that while the French movement, like the working class globally over the past forty years, suffered defeats in the wake of government attacks it was able to limit these defeats. In raising the example of France it is not to say that that course was necessarily open to the Australian movement, or would have been easy to pursue if it was but to make it clear that there are and were always multiple responses to challenges confronting movements, and that accepting one as the only alternative path to disaster can unnecessarily close off other alternative paths which may pose the possibility of a more positive outcome.

Over the course of the Accord, it delivered less and less on its promised objectives. Whilst there was an expansion in the social wage, real wages declined[24]. This decline was not simply problematic due to the stress it put on households but because real wages only failed to decline further as a consequence of increased productivity, i.e. as a consequence of work intensification and the reduction in broader working conditions - which were at the core of Accord Mark III and all subsequent Accords. This normalisation of wage rises to increases to productivity rather than maintaining and improving living standards is now embedded in what is left of Australia’s wage-fixing system under the Fair Work Act[25].

These shifts have resulted in a sharp and ongoing shift in the wages share of GDP, which has helped to drive up company profits. While this shift began under the Accord, it is important to recognise that this shift has occurred across advanced capitalist countries as corporations have sought to overcome declining growth and maximise their share of income[26].

Whilst the adoption of the Accord was contested within the labour movement, and as outlined above it was not a singular experience, its character changed over time. Contrary to some claims within the left, the early phase of the Accord, whilst deeply corporatist, was not neoliberal, in particular, the expansion of the social wage was not a neoliberal project, objectives which could be seen as neoliberal objectives came later in the life of the Accord[27]. Indeed, whilst the solution via collaboration was a break with the historic approaches of many of the communist lead unions, it was not a sharp break from that of many unions, particularly those associated with the right-wing of the ALP and formations to its right, such as the Democratic Labour Party[28]. These more conservative unions had long relied on “friendly” relationships with employers and the state in order to hold their own in demarcation disputes and contests with left unions. Indeed, Peetz argues that it was the ending of these relationships which were the driver of the decline in union membership and power rather than the Accord. Unlike the claims of some on the left, such collaboration is not inherently neoliberal, if anything the experience of neoliberalism globally has been an intensification of hostilities by capital against organised labour. The primary driver of the neoliberal transformation of Australian society was the Hawke and Keating Labor governments[29]. The initial incorporation of neoliberal aspects into the Accord was justified as a necessary defensive response rather than the direct intention of those who proposed and advocated the Accord and its maintenance. While this argument may have been cynical on the part of some of its advocates, it also reflects the extent to which direct advocacy of neoliberalism would have been resisted, even if the movement, like the rest of society, having absorbed neoliberal ideas as a consequence of the hegemonic position neoliberalism[30]. 

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Footnotes
1  Glanz, D. 2020 ‘Morrison’s ‘Accord 2.0’ talks are a trap for the unions’, Solidarity, [online document] accessed 23 May 2021. https://www.solidarity.net.au/unions/morrisons-accord-2-0-talks-are-a-trap-for-the-unions/.
    O’Shea, L. 2020 ‘Beware union leaders bearing deals’, Red Flag, [online document] accessed 23 May 2021. https://redflag.org.au/node/7224.
    Boyle, P. 2020 ‘Reject the Coalition’s Accord-style JobMaker’, Green Left Weekly, [online document] accessed 23 May 2021. https://www.greenleft.org.au/content/reject-coalitions-accord-style-jobmaker.
    Knobloch, B (18 October 2020) ‘How Australia’s Labor Movement Helped Build Neoliberalism’, Jacobin, [online document] accessed 23 May 2021. https://www.jacobinmag.com/2020/10/australia-labor-party-neoliberalism-accord. 
2  Now the Metals Division of the Australian Manufacturing Workers Union 

    Smith, B. A. 2001a ‘Amalgamated Metal Workers & Shipwrights Union (1976 - 1983)’, Australian Trade Union Archives, [online document] accessed 16 May 2021. https://www.atua.org.au/biogs/ALE0053b.htm.
3  Latham, C. ‘Wage rises don't mean job losses’, Green Left Weekly, [online document] accessed 23 May 2021. https://www.greenleft.org.au/content/wage-rises-dont-mean-job-losses.
    Wright, C. F. 2014 ‘The Prices and Incomes Accord: Its significance, impact and legacy’, Journal of Industrial Relations, 56(2):264-272. 2014
4  Wright ibid. 
    Latham ibid.
5  Hewett, J. 2009 ‘Lost lessons of the 100,000 'dead men'’, news.com.au, [online document] accessed 23 May 2021. https://www.news.com.au/news/lost-lessons-of-the-100000-dead-men/news-story/81ef1b0ee808c0db147562597741559b?sv=927bc14851e593f17f7ed5b4ea4305c9.
6  Latham op cit.
7  Strauss, J. 2013 ‘Opposition to the Accord as a social contract’, Labour History, 105:47-62.
8  Wright op cit.
    Stilwell, F. 1991 ‘Wages policy and the Accord’, Journal of Australian Political Economy, 28:27-53.
9  Now the Communist Party of Australia, but distinct from the original CPA which was founded in 1920 and dissolved in 1991
10 Now a major component of the Construction and General Division of the Construction, Forestry, Mining, Maritime, and Energy Union (CFMMEU). 

     Smith, B. A. 2001b ‘Building Workers Industrial Union of Australia (ii) (1962 - 1991)’, Australian Trade Union Archives, [online document] accessed 16 May 2021. https://www.atua.org.au/biogs/ALE0316b.htm.
   Holland, P. and Jerrard, M. 2018 ‘Unions have a history of merging – that’s why the new ‘super union’ makes sense’, The Conversation, [online document] accessed 4 June 2021. https://theconversation.com/unions-have-a-history-of-merging-thats-why-the-new-super-union-makes-sense-93077.
11 These unions amalgamated to form the Maritime Union of Australia and are now the Maritime Division of the CFMMEU. 

     Smith, B. A. 2001c ‘Maritime Union of Australia (1993 - )’, Australian Trade Union Archives, [online document] accessed 16 May 2021. https://www.atua.org.au/biogs/ALE0595b.htm.
     Holland and Jerrard ibid.
12 Bentley, S. 2003 ‘The origins and politics of MUSAA’, Green Left Weekly, [online document] accessed 29 May 2021. https://www.greenleft.org.au/content/origins-and-politics-musaa.
     Strauss op cit.
13 Brown, T. 2004 ‘Silencing dissent to win consent: National training reform in the Accord years’, Labour & Industry, 15(1):33-51.
14 Now part of the Food and Confectionary Division of the AMWU. 

     Smith, B. A. 2001d ) ‘Confectionery Workers Union of Australia (1986 - 1992)’, Australian Trade Union Archives, [online document] accessed 16 May 2021. https://www.atua.org.au/biogs/ALE0379b.htm.
15 Now part of the Construction and General Division of the CFMMEU. 

     Smith, B. A. 2001e ‘Australian Building Construction Employees Builders Labourers Federation (ii) (1976 - 1986)’, Australian Trade Union Archives, [online document] accessed 16 May 2021. https://www.atua.org.au/biogs/ALE0134b.htm;

     Holland and Jerrard op cit.
16 Strauss op cit.
17 Stilwell op cit
     Wright op cit.
     Strauss op cit.
18 Stilwell op cit.
19 Peetz, D. 1998 Unions in a contrary world: The future of the Australian trade union movement, Cambridge University Press: Melbourne.
20 Buchanan, J. Oliver, D. and Briggs C. 2014 ‘Solidarity reconstructed: The impact of the Accord on relations within the Australian union movement’, Journal of Industrial Relations, 56(2):288–307.
21 Peetz op cit.
22 Ewer, P, Hampson, I, Lloyd, C, Rainford, J, Rix, S and Smith, M (1991) Politics and the Accord, Pluto Press: Leichhardt.
23 In 1988, the leadership of Confédération française démocratique du travail (CFDT - French Democratic Confederation of Labour) expelled workplace unions from the Confederation’s federations in health, post, and telecommunications over a series of wildcat strikes that the workplace unions had supported. These expelled workplace unions formed a new federation within Post France and France Telecom, the Solidarity, Unity Democracy PTT - which played a leading role in subsequent mass mobilisations in defence of employment conditions, pensions, and workplace rights within French society over the three decades. Their success led to further splits by the left-wing of CFDT particularly in transport, health, and government services. These make up the core of the Trade Union Solidaires which is one of the most militant and left-wing confederations within the French labour movement.  

     Damesin R. and Denis, J.-M. (2005) ‘SUD trade unions: The new organisations trying to conquer the French trade union scene’, Capital & Class, 86:17-37.

     Connolly, H. 2012 ‘Union renewal in France and Hyman’s universal dualism’, Capital & Class, 36(1):117–134.
24 Stilwell op cit.
     Wright op cit.
25 McKenzie, M. 2018 ‘The Erosion of Minimum Wage Policy in Australia and Labour’s Shrinking Share of Total Income’, Journal of Australian Political Economy, 81:52-77.
26 Lapavitsas, C. Kaltenbrunner, A. Labrinidis, G. Lindo, D. Meadway, J. Michell, J. Painceira, J. P. Pires, E. Powell, J. Stenfors, A. Teles, N. and Vatikotis, L. 2012 Crisis in the Eurozone, Verso: London.
27 Humprys, E. 2018 How Labour Built Neoliberalism: Australia’s Accord, the Labour Movement and the Neoliberal Project, Brill: Leiden.
     Stilwell op cit.
28 Peetz op cit.
     Peetz, D. and Australian National University, Centre for Economic Policy Research 1997 The Accord, compulsory unionism and the paradigm shift in Australian union membership, Centre for Economic Policy Research, Australian National University Canberra.
29 Peetz op cit.
     Hillier, B. 2020 ‘Sally McManus is a neoliberal’, Red Flag, [online document] accessed 23 May 2021. https://redflag.org.au/node/7340
     Harvey, D. 2005 A Brief History of Neoliberalism, Oxford University Press: Oxford.
     Quiggin, J. 1999 ‘Globalisation, neoliberalism and inequality in Australia’, The Economic and Labour Relations Review, 10(2):240—59.
30 Mirowski, P (2013) Never let a serious crisis go to waste: How neoliberalism survived the financial meltdown, Verso: London.

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The limits of Modern Monetary Theory as a solution to neoliberalism

Lisbeth Latham

The application by some governments of quantitative easing (the printing of more money) in response to both the Global Financial Crisis and the economic crisis unleashed by the COVID Pandemic has helped to raise interest in the heterodox economics approach of Modern Monetary Theory (MMT) as the appropriate approach economic development in countries such as Australia. While there are definitely important insights that can be drawn from MMT to inform appropriate budgetary responses, particularly in times of economic crisis, advocates of MMT tend to oversimplify the budgetary problems facing sovereign states during crisis, particularly those states which unlike Australia are not imperialist powers, even if a relatively weak one, and are instead in a dependent position within the global economy, but more importantly, mistakes where the real political struggle around budget priorities exist within the context of neoliberal politics.

MMT is a heterodox macroeconomic approach that focuses on the role of the government in the creation of money/currency and how, with the ending of the Bretton Woods Agreement in 1971 and the end of the convertibility of US dollars to gold, governments gained greater freedom in their monetary policy due to not being bound by the need to be able to honour their currency with gold.

Central to MMT is the idea that no government which is a sovereign issuer of its own currency can ever go bankrupt as they are able to create more money, and that doing so is preferable to a government borrowing money as it avoids the need to pay interest on such a debt. Some advocates of MMT argue that this glimpse of the true nature of the economy fundamentally unravels the core premise of neoliberal austerity which has seen the deprioritisation of spending public services across the globe.

However, the reason we have seen aggressive attempts globally to wind back social spending is not that the neoliberals genuinely believe there just isn’t enough money to spend on public services. Instead, neoliberal austerity is driven by a desire to transfer as much of the wealth being produced into the hands of capitalists, a process that is driving unprecedented levels of wealth concentration. Everything else is simply verbiage to prettify and obfuscate this drive to boost and concentrate profits. In this context, the answer of “printing more money” is still the question of “how do you maintain a sufficient level of profit growth to maintain the capitalist system?”. Shifting this priority will take a struggle against capital and its governments, and all too often MMT tends to push its advocates away from this conclusion into a tangential argument about whether there is genuinely a limit to the money supply.

By shifting the terms of debate to the question of “is there a limit to money”, advocates accept what are really false arguments of capital and their representatives in government as having been given in good faith. While the neoliberal drive has relied heavily on the appearance of a lack of alternative choices, Thatcher’s insistence that “There is No Alternative” being one of the greatest examples, the reality is that in the midst of arguing for the need for surplus budgets, most advanced capitalist countries have happily racked up deficits but at the same time they have been shifting spending priorities, so simply arguing “there are no limits to the spending” is unlikely to address the reality that these governments want to prioritise spending on subsidising business profits rather than on social spending.

This reality can be seen in the examples which MMT advocates point to as proving their point. For many MMTers the increase in government spending, as if from nowhere, in response to the COVID pandemic and in response to the Global Financial Crisis of the late 2000s, is evidence of the truth and power of MMT as a solution. Whilst this does show that governments can spend more, we need to also recognise that spending has also primarily been focused not on meeting the needs of the general population but on maintaining company profits and avoiding mass defaults - indeed the US government’s bailout of US automakers was tied to workers accepting cuts in their working conditions. Moreover, this spending has not been sustained, not because it “cannot be”, instead it has been intentionally wound back and the previous rounds of spending used as a justification of future austerity. This is not to say that the creation of money cannot be a solution to government finances. However, it does highlight that it is necessary to see the questions of how much money the state spends and on what as being primarily political.

Related to this problem is a tendency of MMT advocates to dismiss the question of taxing the rich as not important, as the government can meet its budgetary needs via money creation, and thus from an MMT perspective taxation only really plays a role in the currency circulation which can include, if a government so chooses, wealth redistribution via social spending. There are a number of problems with these positions. It tends to detach money from the real economy and part of the reason we are seeing unprecedented levels of market capitalisation and accompanying individual concentrations of wealth, is that money is not circulating and is instead being drawn from the real economy into speculation in the stock market. More importantly, there is a tendency to reduce the question challenging the concentration of wealth to an at best secondary question - when in reality it should be the primary one of moving to a point of contestation as to who should control the means of production and not just the means of creating money. This problem is highlighted by John Christensen and Nicholas Shaxson regarding how to respond to the massive tax avoidance highlighted in the Panama Papers. “To illustrate this clash, take the words of UK Shadow Chancellor John McDonnell during the Panama Papers tax haven scandal that “every pound avoided in tax by the super-rich is a pound desperately needed by our National Health Service, our schools and our caring services.” We’d strongly agree with this statement — though Bill Mitchell, a prominent MMT economist, attacked it as a “dangerous and misguided narrative for progressives to engage in,” because it “fuels damaging myths” about how the tax and spending system works”.

An easy and ready dismissal of MMT is that its application would simply result in a repetition of the hyperinflation of the Weimar Republic in the early 1920s or Zimbabwe in the late 2000s. However, as Mitchell and Fazi point out there were other factors at play here that triggered hyperinflation most notably disruptions in the supply of goods, not simply the creation of additional money, moreover, they point the example of the creation of additional currency during in Germany between 1933 and 1937, which enabled the Nazi government to rebuild the German economy.

The MMT discussion of the potential risk of inflation, which partly relies on the accurate assertion that creating more money will be no more inflationary than any other stimulus effort such as borrowing more money. They tend to treat the impact of increased money supply in the economy as not just felt via inflationary pressures within a national economy - because most economies are in trade relationships with other economies, changes in volume on money can impact on exchange rates which in turn impacts on trade in those goods being sold internationally will experience a reduction in price on international markets, whilst imported goods will cost more. This can be beneficial to both exporters and manufacturers reliant primarily or exclusively on internal markets - as with the falling value of the currency both become more competitive - if it goes too far it can cause considerable dislocation in the internal economy of a country.

Moreover, if we accept that hyperinflation is a potential problem, even if not primarily driven by the creation of money, then we have to also recognise that MMT’s focus on money as being the solution to modern problems of the economy - particularly where shortages are caused not by a lack of money, but a lack of goods - which we have begun to see during the COVID pandemic due to dramatic shifts in consumption patterns of certain goods, most notably personal protective equipment and vaccines, and as a result of disruption in manufacturing and supply chains due to the virus and accidents such as the blocking of the Suez Canal in March by the Ever Given.

In these circumstances simply creating more money or giving more money to people will not solve these supply issues, indeed it will potentially exacerbate the problems and give rise to Inflation at least in part of, if not the whole of the economy.

While MMT focuses on the ability of governments to simply create money in order to overcome problems with either needing to stimulate the economy or to enable necessary and vital government programmes. These are not the only challenges facing the global economy. Moreover, by articulating an almost evangelical view of having unlocked the secrets of the economy its advocates tend to forget that primarily the issue of spending and consumption in national and international economies are not primarily driven by economics, but instead by politics - with economics being a justifier for political positions.

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