Ilias Ioakeimoglou
The participation of Greece in the euro and the EU is projected by the system as a great achievement. But in practice they only benefit the ruling class, imposing reactionary anti-labour reforms such as the Memoranda. At the same time, the euro transfers the pressure of international competition on wages, forcing cuts in the real wages of workers.
The two foundations of the exploitation regime
The accession to the European Union has been, especially since 1990, a transmission belt for the neoliberal institutional changes in Greece. These are, of course, changes adopted, in various variations, by all countries of advanced capitalism, regardless of whether or not they participate in the EU. However, Greece’s accession to the EU offers governments the greatest opportunity to present neoliberal institutional changes. as imposed from abroad and as unavoidable, because they are a contractual obligation of the country that cannot be disputed. They mitigate, thus, to a great extent, the social resistances to the neoliberal institutional changes.
These changes, after being dramatically accelerated by the memorandum policy, have now constituted a system that imposes a labor exploitation regime very different from the one that existed before 2010. Among these institutional changes (also called structural changes) of greatest importance to the new labor exploitation regime, have changes in the labor market, where we sell our labor skills to businesses for a wage. By imposing neoliberal structural changes on the labor market, governments succeed in reducing the bargaining power of wage labor so that wages remain perpetually low.
The formation of a neoliberal labor market freed from the institutional protection of workers, is the first foundation of the labor exploitation regime established in Greece with the memorandum policy. The second foundationis the adoption of the euro and the restrictions it imposes on the functioning of the economy.
EU and neoliberal changes
The euro and the neoliberal labor market are the two foundations of the labor exploitation mechanism in the sense that they constitute the institutional conditions without which this mechanism could not function, that is, they are conditions for its existence.
Foundation one, the euro: The drachma could, when necessary, change its exchange rate, depreciate (or “slip”, i.e. gradually lose a small part of its value every month). In this way, imported products became more expensive and those exported from Greece became cheaper. In other words, the national currency had the capacity to offer protection, even if temporary, to businesses operating in Greece, because it reduced the pressure they received from international competition. This was done, in fact, in a particularly beneficial way for the companies: thanks to the devaluation, their products acquired a price in euros lower than that of their international competitors, but their price in drachmas did not decrease. With the euro, the playing field has changed as there is no longer the possibility of devaluing the currency, and the entire pressure of international competition is transferred to the companies operating in Greece. Now, in order to sell their products at lower prices compared to international competition, companies have to lower their prices directly in euros. But because this reduces their profits, businesses want to pass on the loss to wage labor, reducing wages. For this to happen, a labor market is needed in which the wage earner will have little and preferably insignificant bargaining power. At this point, neoliberalism jumps onto the scene with its structural changes in the labor market.
Foundation two, the neoliberal structural changes in the labor market: The purchasing power of wages (which we also call real ones wages) is directly proportional to the protection provided by the labor market institutions to employees, proportional to the degree of coverage of employees by collective agreements, the degree of effective operation of the Labor Inspectorate and in general the entire institutional framework of the labor market. This framework, the crystallization of the present and past power relations between labor and capital, is the rules by which it is determined at what price our labor capacities will be sold and how and on what terms they will be consumed by firms and employers. in general. For these reasons, the institutional framework of the labor market is preeminently a site of class competition, and this explains why the state, employers’ organizations and bourgeois parties gather great forces there, especially in the age of total class war waged by neoliberal capitalism. Whoever has powerful positions in the institutional framework of the labor market controls the relation of power in the formation of wages and the terms by which capital consumes our labor capacities.
These are, then, the two foundations of the mechanism of labor exploitation in its current form: the euro and the neoliberal reforms of the labor market. Starting from them we can now see how the mechanism of exploitation works.
The mechanism of exploitation in operation: The euro transfers the entire pressure of international competition on the productive enterprises operating in Greece, and the neoliberal labor market transfers this pressure from enterprises to wage labor. This has the effect of maintaining wages at low levels (excluding, of course, the wages of middle and high-level executives in the private sector).
Correspondingly increased are profits, which are rising for no other reason than technological modernization, no great increase in labor productivity, no miraculous new technologies: the exorbitant profits recorded by the statistics come entirely from the continuous, persistent reduction of real wages and capital’s effort to make this reduction, through expropriation, irreversible.
The decline in real wages comes not only from the synergy of neoliberal labor market reforms and the euro, but also from the endemically high unemployment rate. The unemployment rate in Greece shows a lower limit in the region of 10% and this is related to the amount of productive investment, which remains hopelessly low, so low that new investments are not sufficient to replace the productive capital that is being withdrawn because it has returned or is technologically unprofitable. Here is something that one would not expect from a country of developed capitalism. From 2008 onwards, the proportion of gross capital income invested in productive capital has fallen to 40% from around 70% in 2005-2007. As a result, the production system does not have enough jobs to use the entire labor force. This gives rise to endemic unemployment, which amounts to 10%. Even if all the jobs are filled, one in ten of those actively looking for work will remain unemployed. Even if multiple shifts, extended working hours, overtime etc. are employed, this percentage can be further reduced only temporarily, for as long as external demand can be kept at the very high levels it is at today.
In summary, wage determination is trapped, (a) by the endemically high unemployment rate sustained by low productive investment, (b) by neoliberal labor market reforms that reduce the bargaining power of wage labor, and (c) by euro which transfers the entire pressure of international competition to the economy. The result is the historically unprecedented, for the countries of developed capitalism in peacetime, a reduction in the purchasing power of wages in Greece. The passion with which business, trade unions and bourgeois parties pursue this reduction is no accident, explained by their inability to achieve the high profits to which they are addicted by other means, by the means used by developed capitalism (the capitalism of relative goodwill) and which are technological modernization and labor productivity increases.
The exploitation mechanism’s attack points
However, at what points can this mechanism of labor exploitation be attacked?
Firstlyin transferring the entire pressure of international competition on the Greek economy through the euro.
Secondlyin transferring the pressure of international competition from business to the labor market through neoliberal reforms.
Thirdlyto the right of capitalist ownership to decide what, how much and how we will produce as a country, therefore how big the production system will be, and therefore how many jobs there will be and how many of us will remain unemployed.
Given the absence of the anti-capitalist Left from the central political scene, its interventions in relation to the euro are necessarily limited to the ideological field. As for the questioning of capitalist ownership, it is a field abandoned by the Left, internationally, since the 1980s and after. Therefore, in the absence of preparation, the relevant interventions in this field are forced, for the time being, to be limited to the ideological field. However, with regard to the labor market and its neoliberal reforms that ensure the transfer of the pressure of international competition from businesses to wage labor, the anti-capitalist Left has direct access and can, as a matter of priority, strengthen its kinetic and trade union presence there because it has everything needed for it.
Ilias Ioakeimoglou
2024-04-04 18:30:52