Socialist Alternative

Spanish State: The Coronavirus and the Crisis of Capitalism

Published on

By John Hird, Socialismo Revolucionario (ISA in the Spanish state) Vitoria-Gasteiz

The coronavirus crisis has revealed the fundamental weakness of Spanish capitalism and the outline of what will be massive political upheavals are beginning to be seen.

Economic depression does not automatically bring about massive movements of the working class, but the general uncertainty prevalent in society is already having major political repercussions.

Economic statistics cannot fully reveal the blow felt by millions of working class people. April was the worst month in history in terms of job destruction, with 282,891 new unemployed due to the coronavirus crisis. The number of unemployed has been multiplied by seven. In a month and a half, since March 12, almost 950,000 jobs were lost, according to Social Security data.

The same Ministry has also highlighted that as of April 30, 3,386,785 workers’ jobs were under a situation of total or partial suspension under Temporary Employment Regulation Files (ERTE), the Spanish variant of “furlough” systems which have been implemented internationally. This is 24.25% of all workers in the social security system. Beneficiaries of unemployment benefits exceeded 5.2 million when including those affected by an ERTE, as reported by the Ministry of Labor and Social Economy.

Spain will be this year, along with Italy, at the head of the economic contractions resulting from the Covid-19 crisis, according to the latest IMF forecasts. The Spanish economy will be the most affected of all the countries that make up the Organization for Economic Cooperation and Development (OECD), with a contraction of its gross domestic product (GDP) in 2020 that will reach 14.4%.

Inevitable recession in 2020

Around the world, several hundred million workers have already lost their jobs, totally or partially, and also hundreds of millions will be forced into poverty. This global economic crisis is unprecedented and could surpass that of 1929 in depth and duration, and in all probability will be worse than the 2008 financial crisis. This has important political implications, as the political repercussions and lesson of the latest crisis are a recent memory in the Spanish State, in particular the birth of Podemos and the events in Catalonia.

The pandemic is producing a general rejection of anarchic hypercapitalism, which has allowed obscene inequalities such as the fact that 1% of the world’s wealthiest own more than 82% of wealth. The excesses of economic “globalization” are also being questioned.

Some examples globally: The 26 greatest fortunes of the world accumulate as much wealth as the 800 million poorest people. Living conditions have worsened in 40 of the world’s richest countries, where the middle class has also shrunk, according to the OECD. More than a quarter of working adults are poor. It is calculated that they earn an average of $3.10 a day.

The World Bank predicts that the coronavirus could drag 50 million people into extreme poverty. In the Spanish state, the poorest people could lose proportionally eight times more income than the richest.

Taking into account the estimates for falls in GDP and the increase in unemployment up to 19%, Oxfam Intermón forecasts that the number of poor people in Spain may increase by more than 700,000 people, reaching 10.8 million. The percentage of the population classified as poor would go from 21.5% before COVID-19 to 23.1% after the effects of the pandemic.

In contrast, according to data from the organization, 23 Spanish billionaires have seen the value of their wealth increase by 19.2 billion euros in the 79 days between March 18 and June 4. A reality that contrasts with that of thousands of families facing an uncertain future with very few resources.

Capitalist commentators in the media are forming a narrative that says the economic crisis is due to the effects of the coronavirus, and even greater inequalities to come are inevitable and a kind of medicine that we just have to take without complaint.

This rhetoric must be rejected. The coronavirus has only revealed the enormous pre-existing crisis of world capitalism and in the case of the Spanish state it has shown the absolute weakness of the system.

Lessons from the 2008 Crisis

The great economic recession of 2008 had profound social and political implications in the Spanish state, with wave after wave of workers mobilizing against neoliberal cuts in public services, especially in health and education.

Unfortunately, union leaders did not advance the movement. There was general dissatisfaction with “official parties and movements”, including unions and leftist parties. In this situation, the “Indignados” movement was born. At its peak, millions of people, mainly young people, occupied the squares of cities across the state.

The movement shook the Spanish state to its foundations and was echoed throughout the world. In the universities, leftist intellectuals and former young communists around people like Pablo Iglesias took advantage of the vacuum on the left and launched Podemos. The new party was spectacularly successful and together with other anti-austerity coalitions and activists like Ada Colau in Barcelona, it got many representatives in local councils and regional parliaments. Podemos is now in the national government, in coalition with the “social democratic” PSOE.

Left activists have generally criticized Podemos’ gradual shift to the right after its first electoral successes. Although we supported the formation of a PSOE government after the last general elections, we opposed Podemos entering the government.

As we said at the time:

“… the coalition program commits UP to “compliance with fiscal discipline mechanisms”, and to deficit and debt reduction. This means, especially in the scenario of a new economic crisis that could be close, that priority is given to fiscal stability, and to meeting the criteria imposed by the European Union in relation to the payment of public debt and bailouts, rather than to measures in favor of the working class or public services.

“This is a very dangerous scenario for UP, which is tied to a completely capitalist party such as PSOE in this coalition, and which could become perceived by many workers as more of the same, another party of the “establishment” that crushes their rights and living conditions and makes the workers pay for their economic crises. We have argued before that entering the government, instead of supporting its formation from the outside to block the right and then politically opposing a PSOE government, would leave UP even more isolated from the workers and the struggle in the streets. This withdrawal from the streets and full entry into the institutional game had already caused UP to lose many votes and seats during the last elections, and its support base could be further diminished in favor of other forces that are perceived as more ‘anti-system’. From this point of view, far right Vox could position itself as an anti-system force and rally even more support.”

See original article here

The initial reaction of the left to the coronavirus crisis

Izquierda Unida (IU — part of the Unidas Podemos alliance) advocates suspending the privatization of Bankia’s bank and a public plan of guaranteed work to “perform socially useful work”. In its first stage this program would be intended for 1 million long-term unemployed, although the document does not provide more information on these “socially useful jobs”.

It also contemplates the creation of a larger network of public residences for older people — where a huge number of deaths from coronavirus have taken place — and the boosting of public spending on Culture to reach 0.60% of GDP in 2019 — a growth of 2 billion euros.

Although we welcome the partial reforms IU advocates, we believe that they should go much further. Reforms in favor of the working class can only be guaranteed in the long term with a serious program that calls for the nationalization of banks and multinationals under democratic control.

IU has said: “This crisis is accelerating the process of restructuring capitalism on a global scale and highlights the expiry of the model which has been built in Spain in the last four decades.

“It is about building a new common sense that prioritizes everyone over a small few, cooperation against competition, solidarity against selfishness, the State against the market.”

Capitalism and the capitalist class will not voluntarily submit to “cooperation” and show “solidarity” with the victims of their system. Why would they, when their profits are at stake?

What is lacking in IU’s statements is a clear socialist program that can mobilize the working class to transform society. Good words and intentions are not enough in these times.

Anticapitalist split from Podemos

A much more significant development has been the recent split of “Anticapitalistas” from Podemos

In a press conference after a massive vote of its members to leave Podemos, they highlighted the following points:

It is necessary to open a process of political redefinition to face the new stage that will open when the coronavirus health crisis passes, in which major political, cultural and social realignments will take place.

“This Government (PSOE-UP) is of the lesser evil. It is sustained more by fear of the right than by its own merits. It is missing an extraordinary opportunity to promote far-reaching reforms and generate another relationship of forces. Its situation will worsen with the passage of time and is the fault of its own pusillanimity.”

“Podemos is no longer the organization that we aspired to build in the beginning,” their statement said.

They also criticize the undemocratic direction that Podemos has taken: “Centralizing powers and decisions in a small group of people linked to public office and to the General Secretary”, which“ leaves little room for pluralist collective work ”; and the scarce presence of the grassroots in the party: “The militant organization and the force from below that Podemos had at the time it has been diluted, disorganized and evaporated with this model, without this having translated, as they pretended to justify, into an improvement in the electoral results ”.

“The Government does not break with the orthodox economic framework, does opt for the redistribution of wealth, to radically reinforce the public sector and to disobey neoliberal institutions.”

The anti-capitalists have pledged to hold a conference, when the lockdown is lifted, to try to regroup the left. They talk about helping to promote a strong and broad, working-class, environmentalist, and feminist movement that is opposed to austerity and the cuts that are likely to come.

Questioning Podemos’ limited reformist approach, they say: “At this stage, primaries and parliamentary committees are not going to suffice. We are going to have to renew repertoires of struggle: occupy factories that close, rent strikes so that they do not scam us, massive mobilizations to avoid cuts to public services. ”

We recognize and welcome this important development and we will work with any force on the left that wants to build a socialist movement of struggle.

A volatile situation

The volatile situation in the Spanish state came to light when Prime Minister Sánchez was forced to make a pact with EH Bildu (leftist nationalist party in the Basque Country) to prolong the “state of alarm” in place to facilitate lockdown restrictions, which has been strongly criticized by the right.

This agreement raises the possibility of repeal of the anti-worker labor reform. This legislation from the previous right-wing PP government in 2012 places restrictions on the rights of workers and it gives employers more power to “hire and fire.”

This has raised the alarm on the right and among large companies, including the ruling party in the Basque Country, the right wing nationalist PNV.

The President of the CEOE bosses’ union, Antonio Garamendi, said: “We have suspended, for now, all social dialogue meetings with the Government until they give us explanations about what they have signed with EH Bildu.”

La Vanguardia newspaper reported that in a poll, 66% support the repeal of the labor reform while in response to the question: Are layoffs and job cuts taking advantage of the Covid-19 crisis? 81% said yes.

The Spanish media have spent years trying to convince the population of the need to control the unions and cut severance pay and other rights. This important change in opinion on the subject is the first sign of a change of consciousness and is having a polarizing effect on society.

We cannot accurately predict the course of political events arising from the new economic crisis, but on the basis of events after 2008, it is clear there will be fundamental changes. After 2008, in addition to the Indignados movement, there was the historical clash between the Catalan masses and the Spanish state.

The split in Podemos is an indication of what is to come. Trade unionists, youth and left-wing activists feel the threat of the far-right party Vox, which has recently been on the streets demonstrating and harassing the left, with its sexist, homophobic and pro-business message.

The task of the left in the Spanish state is to take to the streets with a clear socialist program for the transformation of society and build a movement that defends all the hard-won rights of the working class and does not compromise with capitalism or its institutions as unfortunately Podemos has done.

Latest articles


European Farmer Protests Shake The Political Establishment

Farmer protests have raged across Europe since last December, capturing headlines as farmers have descended onto Brussels in thousands of tractors, sprayed liquid manure...

Argentina Strikes Against Milei

For the second time in five months, trade unions in Argentina built a 24-hour general strike on May 9 against far-right president Javier Milei’s...

International Women’s Day 2024: Demonstrate Against War, Oppression, & Capitalism!

This year’s International Women’s Day has a very dark setting. We have a climate crisis to solve. We have hundreds of thousands of hungry...

China’s ‘Involuted’ Economy

The Chinese economy is tipping into a deflationary crisis with a worsening debt crunch, falling wages and prices, and increasing reliance of fraudulent economic...