State-capital, new alliance – PCF website

Posted on 23/11/2022 by PCF

The Gabriel-Péri Foundation and Économie et Politique magazine organized a workshop on November 8 on the “new alliance between state and capital”. Below is a summary of Évelyne Ternant’s speech.

Three periods are identifiable in the relationship between state and capital; they correspond to the major structural evolutions of capitalism since the Second World War.

The so-called “sacred alliance” period, until the late 1960s, is what Paul Boccara described as “social state monopoly capitalism.” It is characterized by a large-scale depreciation of capital, especially through public companies operating with low, zero or negative profit margins, such as EDF-GDF and SNCF. Therefore, private capital achieves very high rates of return. It is the era of triumphant Keynesianism that thought it had found the key to crisis-free capitalism. But this was to forget the inexorable logic of a growth that overdevelops material capital to the detriment of human expenses, at a time when precisely the technological revolution requires, on the contrary, the deployment of human capacities, because information becomes an essential vector of production processes. The mechanism of “crisis-free capitalism” caught up in the late 1960s, with rising unemployment and inflation in response to the decline in profitability of over-accumulated capital.

A second period begins in the relationship between the state and capital, with the advent of liberal policies of deregulation, privatization and financial globalization. They lower the barriers to allow capital in need of profit to spread around the world, invest in financial markets and engage in profitable public sector jobs. The policies of capitalist countries disrupt all markets; the labor market is more flexible, more uncertain; in the market of goods and services, large public companies were dissolved and placed in competition; in the international market, free trade paves the way for the globalization of multinational business chains and value chains. Financial markets exercise a dictatorship over corporate management and public policies devoted to austerity. Companies are subject to demands of financial profitability that are incompatible with the long time for innovation and social conditions of employment, which contributes greatly to deindustrialization. The substantial accumulation of financial capital, supported by a pile of debt fueled by bank money creation, led to the financial crisis of 2008, where we came close to a global bank failure. This period, when the perimeter of the public sector is reduced and its means of action are weakened, is in reality that of “a follow-up engagement after capital elections”. Direct aid and social and tax exemptions for businesses are increasing, capitalist management criteria are spreading, including the public sector, with the adoption of managerial methods.

A third period begins with the crisis of 2008; that of a long multifaceted systemic crisis, consisting of a sequence and a combination of multiple episodes, the most recent of which are the health crisis and the global energy crisis. Public intervention becomes massive, piecemeal, like a firewall during major risks to save capital. This current “who can” alliance between state and capital presents a double paradox:

– Financial support of an unprecedented scale and without social and ecological conditions of “every condition” is combined with a frontal attack on social spending. This cocktail makes macroeconomic budgetary and monetary policies inadequate to meet society’s needs. World inflation, which began before the war in Ukraine, resulted from the speculative operation of markets and excess financial capital. To combat it, capitalist leaders have chosen recession, thereby worsening unemployment, deindustrialization and the poor state of public services. The return of companies to state control, such as EDF, is not accompanied by an industrial strategy of reconquest, but by the pursuit of dismantling and privatization. Finally, cooperation between political leaders and the business community is evident; witness the Uber files affair in France, where E. Macron is directly involved, or the intervention of financial markets in the election of political personnel in England and Italy.

– The second paradox of the “new alliance” is due to the evolution of state functions: a large part of economic functions are delegated to other institutional levels, such as Europe and the regions. It is through increased political and military activism that the nation state today protects its economic base. The systemic crisis of capitalism today takes on an intense geopolitical dimension related to the war in Ukraine, the energy crisis, the coming global recession. In an unceasing rush towards a war economy, “sparing who can for capital” results in an increase in interstate tensions and the strengthening of American hegemony, which exacerbates intra-European rivalries.

A radical transformation of society is urgently needed to build the development desired by citizens, with respect for human beings, living organisms and the planet. It will not be done under the rule of capital and its predatory market logic. Regaining control over the use of money, our money, banks’, companies’, public money, requires the seizure of power by employees and citizens.

The project of safety or training at work and its multiple dimensions is a strong axis of social transformation, not only because it leads to overcoming the labor market, but because it also poses the question of the free time of the unemployed. It thus creates the link between social mobilizations and emancipatory social aspirations that are growing in the feminist movement, among the younger generations in their demanding relationship with work, or even in society as a whole when it refuses to be robbed of its retirement time. available for family, social, cultural, political activities, which are vital to making society.

Evelyne Ternant

member of the National Executive Committee

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