{"id":7092,"date":"2021-06-07T13:20:00","date_gmt":"2021-06-07T11:20:00","guid":{"rendered":"http:\/\/dpz.medienlabor-hosting.de\/?p=7092"},"modified":"2024-03-13T11:30:15","modified_gmt":"2024-03-13T10:30:15","slug":"a-new-internationalism-on-the-terms-of-labour","status":"publish","type":"post","link":"https:\/\/www.progressives-zentrum.org\/en\/a-new-internationalism-on-the-terms-of-labour\/","title":{"rendered":"A new internationalism on the terms of labour"},"content":{"rendered":"\n

In this blog post for the Progressive Governance Digital Summit 2021, Ann Pettifor advocates for a paradigm shift towards demand-side economics for the 99%.<\/em><\/strong><\/p>\n\n\n\n

If progressive European political parties are to achieve both relevance and electoral success, a paradigm shift is required: away from Social Democracy\u2019s attachment to financialised globalisation. If they aim to defeat nationalism, and to end the cycle of debt inflations and deflations on one side and trade wars on the other, it is not only necessary, but urgent to end the class wars that globalisation generates, and to revert back to domestic and international regulation on the terms of labour and in the spirit of John Maynard Keynes. President Joe Biden\u2019s revival of the radical concept of \u2018full employment\u2019 is an example to follow.<\/p>\n\n\n\n

The Covid-19 crisis illuminated the reality of globalisation. World leaders proved incapable of convening an international summit to prevent the spread of the pandemic and to collaborate on a vaccine for the world\u2019s people \u2013 the 99 per cent. However, and in contrast, public servants at the US Federal Reserve, the ECB, and the Bank of England engaged in decisive, expansive and internationally coordinated action \u2013 to save the 1 per cent from their own risk-taking in March 2020. As the pandemic hit, asset prices adjusted sharply, and the $200 trillion shadow banking system once again posed a systemic threat to the global economy.<\/p>\n\n\n\n

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Re-watch Ann Pettifor at the Progressive Governance Digital Summit 2021. <\/a><\/em><\/p>\n\n\n\n

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As the chief economist of Britain\u2019s Trades Union Congress has explained: \u201cglobalisation is a system amounting to internationalism on the terms of capital\u201d. Instead, Social Democrats should demand a new internationalism \u2013 one based on terms set by labour, the 99 per cent. There are hopeful signs that the new Biden administration understands this, for in a recent speech the President argued that his administration would \u201cbuild an economy that rewards work, not just wealth.\u201d<\/p>\n\n\n\n

Supply-side economics and the globalisation of wealth<\/h2>\n\n\n\n

For decades, economists have successfully espoused supply-side economics, based on three principles: deregulation of the public good that is the monetary system by \u2018the invisible hand\u2019 of private capital markets; lower taxes; the deregulation of the labour and other markets; and the disarming of trades unionism. The consequences were predictable: the 1 per cent used deregulation coupled with public subsidies provided by monetary and taxation systems to make massive capital gains in private capital markets, while burying households and firms in mountains of debt.<\/p>\n\n\n\n

The deregulation of the labour market meant that wages were repressed or stagnant, leading to cuts in purchasing power. At the same time \u2018austerity\u2019 shrunk the social wage \u2013 in the form of state benefits. Falling incomes led to increased private borrowing and lower tax revenues; and to under-consumption of locally produced goods and services, as workers found the product they produced unaffordable.<\/p>\n\n\n\n

Under-consumption led to a build-up of gluts in commodities, goods, or services. In short: over-production in domestic markets. Outlets for this build-up of gluts were found in foreign export markets. The financial gains made in export markets were funnelled to the 1 per cent and the companies they control.<\/p>\n\n\n\n

Germany is a classic economic model of under-consumption and over-production. With the fall of the Berlin Wall, poverty and insecurity rose, largely due to the 2003 Hartz IV \u2018reforms\u2019 introduced by Chancellor Gerhard Schr\u00f6der. Tax cuts for high earners and the government\u2019s \u2018fanatical opposition to borrowing\u2019 for public investment shifted Germany\u2019s purchasing power away from the majority, and towards wealthy elites and their firms \u2013 that spend far less than they earn.<\/p>\n\n\n\n

More than a quarter of the value generated by German workers and capital was sent abroad before 2008, mostly to Germany\u2019s European neighbours, according to Matthew C. Klein and Michael Pettis in their book, Trade Wars are Class Wars. German firms were able to avoid the stagnation in their home market by selling to customers in other countries and making capital gains for shareholders. Profits rose dramatically as costs (wages) held steady and export revenues rose in line with global growth. Naturally, these imbalances between labour on the one hand, and wealth on the other, led to political tensions and, predictably, to the rise of far-right parties espousing nationalism.<\/p>\n\n\n\n

A paradigm shift?<\/h2>\n\n\n\n

To defeat nationalism, to end the cycle of debt inflations and deflations and trade wars, it is both urgent and necessary to end class wars generated by globalisation. That requires both domestic and international regulation and reforms to promote a new internationalism on the terms of labour. To do so, societies need to revive Keynes\u2019s demand policies for careful management of the monetary and financial system under the public authority and regulation of the state; for decent incomes to stimulate investment and activity at home; and for government intervention in a slump.<\/p>\n\n\n\n

A paradigm shift based on Keynes\u2019s demand-side policies, as happened under President Franklin D. Roosevelt in 1933, and the Bretton Woods system of 1945-70, may re-emerge now under President Biden.<\/p>\n\n\n\n

In his speech to a joint session of Congress on 28 April 2021, President Biden remarked that \u201cWall Street didn\u2019t build this country. The middle class built the country, and unions built the middle class.\u201d At a time when US corporate profits were the highest they\u2019ve been in decades, and workers\u2019 pay the lowest in 70 years, he revived the concept of \u2018full employment\u2019. In the context of today\u2019s obscene levels of inequality, full employment is a radical, and for the 1 per cent, unsettling demand.<\/p>\n\n\n\n

\u201cWhen it comes to the economy we\u2019re building,\u201d Biden said, \u201crising wages aren\u2019t a bug, they\u2019re a feature. We want to get something economists call \u2018full employment\u2019. Instead of workers competing with each other for jobs that are scarce, we want employers to compete with each other to attract workers. [\u2026] This isn\u2019t just good for individual workers, it also makes our economy a whole lot stronger. When American workers have more money to spend, American businesses benefit. We all benefit.\u201d<\/p>\n\n\n\n

However, complacency remains a risk. The balance of political forces in the US and Europe still favour the 1 per cent \u2013 and the nationalist, intolerant authoritarianism, and even fascism, that is the Polanyian response to globalisation. A new internationalism on the terms of labour is the necessary paradigm shift if we are to counter the rise of nationalism. What is needed are policies that subordinate and transform globalisation into a genuine, cooperative, and coordinated inter-nationalism \u2013 benefiting the 99 per cent.<\/p>\n\n\n\n

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Author<\/h2>\n\n\n
\"\"<\/a><\/div>

Ann Pettifor<\/a><\/h4>
<\/div>
<\/div><\/div>
Ann Pettifor\u00a0is best known for her prediction of the Great Financial Crisis in\u00a0The Coming First World Debt Crisis\u00a0(Palgrave 2006). In 2008 she co-authored\u00a0The Green New Deal\u00a0published by New Economics Foundation. In 2017 Verso published\u00a0The Production of Money\u00a0on the nature of money, debt and the finance sector. She is the author of\u00a0The Case for The Green New Deal\u00a0(Verso, 2019). <\/div><\/div>\n\n\n\n
<\/span>
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Further articles<\/h3>\n\n\n
\"A<\/a><\/div>

Buried Villages, Fragile Democracies: Coal, Community, and the Unsteady Politics of the Climate Transition<\/a><\/h4>
Posted on<\/span>
The transition away from fossil fuels is as much about democratic resilience as it is about energy. Steve Patterson explores the \u201cpolitical whiplash\u201d of shifting national policies and the enduring struggle to protect community heritage from the erosion of both physical landscapes and institutional norms.<\/div>
Steve Patterson<\/a><\/div>
Debate<\/a>, Project Report<\/a><\/div><\/div><\/div>
\"\"<\/a><\/div>

Revitalising the Industrial Heartlands: Retrospective and Results from the Transatlantic Dialogue<\/a><\/h4>
Posted on<\/span>
Drawing on three years of transatlantic research and exchange, the project's closing conference explored actionable strategies for heartland revitalization\u2014demonstrating that cities and municipalities are driving both economic revival and democratic renewal.<\/div>
Aaron Remus<\/a>, Axel Ruppert<\/a><\/div>
Event Report<\/a><\/div><\/div><\/div>
\"Conference<\/a><\/div>

Trade, Trust and Transition \u2013 Transatlantic Perspectives in Times of Geopolitical Disruption<\/a><\/h4>
Posted on<\/span>
In an era marked by global insecurity, geopolitical friction, and economic transformation, the Progressive Economics Network (PEN) reconvened in Washington, D.C.<\/div>
S\u00f6ren Hellmonds<\/a>, Mariam Ghebregergis<\/a><\/div>
Event Report<\/a>, News<\/a><\/div><\/div><\/div> <\/div>\n\n\n\n
\n
To the blog<\/a><\/div>\n<\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"

The balance of political forces in the US and Europe still favour the 1%.<\/p>\n","protected":false},"author":14,"featured_media":7095,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[219],"tags":[272,309,198,197,334,36,321],"class_list":["post-7092","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-debate","tag-hausblog","tag-eu","tag-gerechte-marktwirtschaft","tag-sozial-oekologische-marktwirtschaft","tag-nationalismus","tag-pgs21","tag-usa"],"acf":[],"yoast_head":"\nA new internationalism on the terms of labour - Das Progressive Zentrum - EN<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.progressives-zentrum.org\/en\/a-new-internationalism-on-the-terms-of-labour\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A new internationalism on the terms of labour\" \/>\n<meta property=\"og:description\" content=\"The balance of political forces in the US and Europe still favour the 1%.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.progressives-zentrum.org\/en\/a-new-internationalism-on-the-terms-of-labour\/\" \/>\n<meta property=\"og:site_name\" content=\"Das Progressive Zentrum - 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