Proposals for the left agenda in times of crisis

[Katja Kipping is a member of Die Linke (The Left Party, Germany). She presented this paper as an opening plenary talk at the Left Forum, New York, April 17, 2009]


Right now we experience a time in which fast changes are possible. Several Demands, Proposals or political aims, which were condemned by the ruling elites in politics, are now taken over by the ruling elites. Just some examples for this phenomenon from the German parliament:

  • When the Left Party was demanding more cash for children in the poorest families, we were blamed for wasting money. But now, the Federal Government itself has launched an educational support package for those children.
  • Until recently, our motions for an upper limit on managers’ salaries were rejected, but now the CDU and the SPD have discovered this issue as well.
  • For decades it was unthinkable to the ruling political and media elite that there might be other acceptable forms of ownership apart from private companies. But now, the Federal Government has agreed an expropriation law (to take over private banks hit by the global financial crisis)


As we can see, the crisis opens a window of opportunity. This window implies the opportunity that as a result of the crisis we could come closer to the practice of democratic socialism. However, it also includes the risk, that as a result of the crisis anti-democratic, reactionary and authoritarian forces will be strengthen, while democratic, left-wing-forces will be weakened. Therefore there is no reason for left-wing activist to become complacent.


What we need now is a thorough-going analysis and a debate about the left agenda in times of crisis. For this agenda I will outline six proposals in the following.



1. Calling the crisis by its real name/ Telling it straight


Even now, the official narrative is that the crisis was caused by a few peoples’ greed and excess. We have our own alternative narrative to set against this interpretation, however. Our job is to tell it straight: this crisis – and we are still only seeing the tip of the iceberg – is not just a financial crisis; it is a crisis of real existing capitalism.


The fact is that financial-market-driven capitalism is reliant on constant growth – but as this growth outgrew its real productive base long ago it inevitably caused a virtual financial bubble which was bound to burst sooner or later. So the reason for the crisis is determined by the system and not by a few peoples’ greed.


Since the ruling political class refuses to commit to this simple fact, their response to the crisis is similar to the "headless chicken" approach: a lot of action, but little result and obviously no solution. They shy away from tackling the roots of the problem. Ultimately they have nothing to show for it but symbolic policies.


2. Preventing arsonists from being put in charge of the fire brigade


Unfortunately, the German Federal Government is still receiving good marks from the public, for its supposedly efficient handling of the crisis. However, the figure Mr. Tietmeyer alone shows the Federal Government’s supposed crisis management in its true colours.


The Chancellor announced to the Bundestag that she was planning to appoint Mr. Tietmeyer as the chief advisor of the crisis. Let me just remind you: Tietmeyer was one of the leading architects of the global financial casino. It was him who cheerfully announced to the World Economic Forum that from now on, politics would be controlled by the financial markets. This appointment failed due to the protest of the Social-democrats. Nevertheless it is symptomatic for dominant staff-policy.


That is like putting arsonists in charge of the fire brigade. Any mayor who appointed a notorious pyromaniac as the head of the voluntary fire service would expect to be drummed out of office. And yet that is exactly what the Federal Government is doing: the very people who caused the crisis are now in charge of crisis management.

3. We don’t pay for your crisis


All the bank bail-outs and economic packages have to be paid – one day. I am sure, we all here would agree in the demand that the bill should be paid by those who caused the crisis. This seems so logical. Nevertheless, our proposals for a special taxation of millionaires or for a Tobin-tax are still rejected by the majority of the German parliament. Therefore we have to face the possibility, that the ruling political class – finally – is expecting the pensioners, the workers and the unemployed to foot the bill.


In Germany the countdown to the next bundestag elections is about to start, so harsher social policy measures are unlikely to be announced at present. But the signs are already there: young hotheads of the CDU who respond to the crisis by urging pensioners to make sacrifices. And yet it was the cuts in statutory pension which forced increasing numbers of people to invest in private funds in order to save for retirement.


These funds were compelled to generate profits, thus intensifying the pressure on the global financial casino. Still, after this experience, calling for pension cuts now? Anyone who does so has learnt nothing – absolutely nothing – from the crisis.


Besides the attack on pensions, an attack on social benefits is looming, as well. To prepare the ground for that, right-wing politicians are already starting to drum up     resentments against the unemployed. The chairman of the youth section of the Conservative party announced, for example, that increasing the standard benefit rate is tantamount  to a stimulus for the tobacco and drinks industry. This comment is an extreme expression of an idea that others are airing more subtly.


Whenever even a minor increase in the social benefits is mooted, the established politicians remind us of the armies of employed who work from morning till night and still have very little to show for it. Thereby they convey the impression, that the poorness of a hairdresser or the low wage of a skilled worked is caused by the social benefit for the poorest.


We, being familiar with Marxist theory, know, if workers aren’t earning enough, it’s because their labour has to generate value added and profits as well. It is certainly not because we are giving everyone a stake in society from our tax revenue.


In essence, it is the familiar old tactic by the ruling elites: play off those who have little against those who have nothing. We should recognise this ploy for what it is: class warfare from top down. Not only in times of crisis, we should give this playing off against each other no chance and stand together, employed and unemployed.

4. Anticyclical reform measures for the poorest


If there is a single reform strategy which could cushion – not solve but cushion – the crisis, it is anticyclical financial policy. In other words, the state has to invest money – as even the government has recognised. But unfortunately, it is the wealthy, who are benefiting most from the economic packages. The unemployed and the low earners are receiving a paltry two percent under the second national economic stimulus package.

But if we are serious about kick-starting the economy, we need to ensure that people on low to middle incomes have more money at their disposal. Studies on saving patterns clearly show that if a wealthy person is given more money, he or she tends to spend it for a further share certificate. People on lower incomes, on the other hand, tend to spend the money straight away on the many things they have needed but haven’t been able to buy before.


An effective economic stimulus package should therefore be targeted towards people on low incomes, pensioners and benefit claimants. Left-wing keneysian solutions such as a future investment programme and an increase in benefits can cushion the impacts of the crisis. But left-wing policy needs to go further. It means fighting for control over production conditions and for self-determination over our own lives.

5. The issue of ownership


In that respect we are well advised to raise the ownership issue. After all, we only have half a democracy as long as there is no democratic control of the economy. However a purely formalistic approach to nationalization, which really just means that instead of some of the managers, a handful of ministerial officials have a seat on the supervisory  board, is not much of an improvement.


When it comes to the issue of ownership, the yardstick which should always be applied by democratic socialists is to what extent the control over production conditions or the right of disposal improves for the people directly affected.


For dealing with this topic, I would like to highlight the difference between the two terms nationalization and socialization. Dealing with the question of the right of disposal, in my speech the term "nationalisation" stands for putting something under the centralized control of the states bureaucracy. While the term "socialization" stands for putting something under democratic and public control, under the control of those people, who are affected.


There are two ways for socializations, I’d like to advocate. Firstly, in the interests of economic democracy, higher codetermination and workers participation are essential. Ultimately codetermination must extend to the issue of what is produced, and how it is produced.


In future, for example, it should not be the shareholders who decide on whether to relocate production. Rather, the workers and the local community should be given the option of taking over the factory. If the workforce votes in favour of this option, then the entire production plant – including all the means of production, customer data and all the contracts should stay where it is.


Secondly, forms of solidarity-based economic management such as cooperatives must be promoted. These alternative forms are the physical embodiment of our conviction that capitalism is not the end of history. The already existing solidarity-based economic enterprises are a practical demonstration that alternative forms of economic management and consumption are possible.

6. A referendum about the future of the banks


At present, the ownership issue has mainly arisen in the public debate about the banks at risk from bankruptcy. The mere fact that the German Federal Government has agreed the nationalization of the Hypo Real Estate Bank as an emergency measure shows that when it comes to the bank, the call or simple nationalization is not necessarily a pure left-wing solution.


However, the question mark over the banks’ future offers a good opportunity to hold a nationwide referendum  about the future form of ownership for the banks. I suggest, that the people, who are the sovereign power in a democracy, decide on the future form of ownership for the banks. Unfortunately, the German constitution does not comprise   such a nationwide referendum, yet. But we live in challenging times. And challenging times demand for challenging measures.


Such a referendum would of course encourage debates about the different forms of ownership. And in these debates we could lobby for socialization of the banks. (That means putting them on the same footing as the saving banks or as solidarity-based cooperative banks, which have proved to be a rock of stability in the current crisis.) If we call in our different countries for such a referendum, we take up an old idea from Rosa Luxemburg: "The only way to the practice of socialism is the school of public life itself, the most unlimited, the broadest democracy and public opinion."

To sum up, a left agenda in the time of crisis consist of

  1. calling the crisis by its real name – crisis of the real existing capitalism;
  2. showing that the very people who caused the crisis are now in charge of crisis management;
  3. Giving no chance to the playing off employed against unemployed and saying together: We don’t pay for your crisis;
  4. fighting for economic stimulus packages, which are targeted towards people on low incomes, pensioners and benefit claimants;
  5. Raising the issue of ownership and advocating the idea of socialization of the production and
  6. calling for a referendum about the future ownership for the banks.

Doing so, we have a good chance in using the window of opportunity for coming closer to socialist practice.

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