SCHMIDT IN TROUBLE
WITH THE UNIONS
"We have now realized that the honeymoon with the coalition is over. After the great beginning in 1969, we are now struck by a definite disillusionment." If was with this statement that Heinz Oskar Vetter, president of the Deutscher Gewerkschaftsbund (DGB, West Germany's central trade-union federation), composed of sixteen unions with a total of 7.5 million members and dominated by the Social Democracy, began his interview in the first issue of the weekly magazine Der Spiegel for 1977. Just a few days after the government inaugural declaration of Chancellor Helmut Schmidt, in which he song the praises of the social -market economy, * Vetter noted the following fact: for the third time in a row, there are more than a million unemployed in West Germany. He added: "If the social market economy is unable to reestablish full employment through a collective effort in the short term, then one may wonder whether if represents a valid economic system for the future." In addition, Vetter attacked the thesis upheld by Schmidt and the bourgeoisie according to which new jobs would be created if profits rise faster than wages. He likewise opposed the proposal of the Schmidt cabinet to grant further tax breaks to the employers. And finally, he attacked the attempts to "reorganize" the pension and health insurance systems as well as the coalition agreements on workers participation. It was a bombshell. For the first time, the government's inaugural declaration was not met by great applause and devotion from the union leadership. In 1969 Brandt had been greeted with euphoria; in 1972 Brandt's cancellation of reforms had been accepted; and in 1974 Schmidt was hailed as a hero. This time, however, the government was met with harsh criticism. A few days later, the Social Democrat Vetter dealt a new blow to his political friends in the SPD (Sozialdemokratische Partel Deutschlands - Social Democratic party of Germany). In an interview with the Springer newspaper Welt am Sontag (January 2, 1977), he declared: "We don't like it at all, but this time we're holding the club. " In saying this, he gave the clearest possible answer to the question of whether he wanted to fight unemployment by reducing the workweek. Vetter's "interview war" provoked a torrent of further positions by the major trade-union leaders. They could 20 west germany by WERNER HÜLSBERG not avoid taking positions, for contract negotiations are either under way or about to begin in their own sectors. E. Loderer, head of the metalworkers union, which is now demanding a 10% wage increase, and H. Kluncker of the social service employees union, which in a few weeks will open negotiations on the basis of demands for an 8.5% wage increase and additional vacation payments, seized upon Vetter's rejection of the government program to strike poses on the wage front and take advantage of the light minded manner in which the government has responded to the problem of the unemployment of more than a million workers. Nevertheless, Vetter drew some criticism from his own ranks, no doubt because of his proposal to "link reductions in the workweek to losses of income, in other words, reductions in the workweek without complete wage compensation. It is true that he did not make his attacks on the government with a perspective of class struggle, nor did he cite the struggle for reduction of the workweek as a present task of the trode unions; in fact, he envisioned such a reduction only in the "medium and long term. " Nonetheless, reaction to these aftacks from the bourgeois side was prompt and vehement. Welt am Sontag accused Vetter of being an "incessant preacher" for *the march to the trode-union state. "The Suddeutsche Zeitung also sounded the alarm of "the threat of the trade-union state" and the Frankfurter Allgemeine Zeitung formulated the concerns of the bourgeoisie in the following exaggerated manner: "Who really governs this country? The government that comes out of democratic elections or the trode unions? Do the trade unions command the state and are we the trade unions? This does not bear much resemblance to a parliamentary democracy. ...The trode-union federation sees itself as a parallel government or even as standing above the government." The reaction of the bourgeois parties ran along the same lines. Lampersbach, president of the CDU (Christian Democratic Union), saw the "trade-union state looming on the horizon. " The CSU (Christian Social Union) saw Vetter's words as confirmation of *the alternative of freedom or socialism, " and Hans Dietrich Genscher, vice-chancellor and president of the FDP (Free Democratic party, the SPD's partner in the government coalition), feared that West Germany was on the way to becoming a "banana republic."
It is understandable that these gentlemen are upset. Frictions in the cabinet, which have led to resignations, the "pension fraud, " which led to the rise of opposition to Schmidt within the SPD for the first time, and the government declaration, which was disappointing to the Social Democratic voters, have placed the government in a bad light after only a few weeks in office and have touched off a process of strong decomposition that is clear for all to see. Unfortunately for the bourgeoisie, the CDU/CSU, divided among itself and Incapable of action, cannot serve as an altemative in the short term. The government, torn by internal differences, trails behind events and flipflops from one direction to another. This is no small thing at a time when the new year is just beginning with all its problems. The passive attitude of the trade-union bureaucracy and "pact of stability and social peace" (in sum, a "model Germany") are the heart and soul of the Schmidt policy, which consists of making the working class bear the burden of the crisis and the dismantling of the social security system. From the standpoint of the employers and their interests, the "priviliged relations" of the SPD as the major government party with the trade-union leadership represents Schmidt's essential advantage over Helmut Kohl's CDU. The "interview war" unmistakably raises the question of whether the years of the rallying of the trode-union bureaucracy behind the policy of the Social Democratic government have now given way to a phase of differentiation and conflict. The background Our analysis of the outcome of the legislative elections last October led us to the conclusion that the SPD was
HELMUT SCHMIDT in trouble: "If it wants to remain in the government it will more than ever have to govern against the working class. This implies the risk of losing support among the workers. With the aid of the trade-union bureaucracy, it will try to continue the orientation that Helmut Schmidt has imposed during the economic crisis. There is no other choice. But sooner or later this orientation will lead to differentiations or even breaks within the unions, in relation to the policy of 'moderation' of demands. " (INPRECOR, No. 60. October 21, 1976.) When Schmidt succeeded Brandt nobody expected a new Social Democratic "reform program, " nobody within the SPD and the trode-union bureaucracy and nobody among the Social Democratic supporters. Schmidt simply aroused the hope that he represented the "magician" capable of plugging the leaks, the person who could master the economic crisis in the short term and who, on the basis of a new "upturn, " could breathe new life into the reform policy of the Social Democracy. In the meantime, the "miracle" of 1974 has gone up in smoke and the miracle maker is himself in trouble. The economic crisis was not ephemeral. Contrary to the hopes and optimistic speeches of the SPD, if turned out to be the signal of a general transformation of economic development which further narrowed the possibilities of making concessions to the masses. Finally, as the prophecies ran up against economic reality, the concept of integrating the working class through the vehicle of the trade-union bureaucracy appeared quite fragile. For the bureaucracy's acceptance of one million unemployed and a lowering of real wages not only come under growing criticism from the rank and file of the trade unions, but also placed the specific interests of the bureaucracy itself in question. Thus, the bureaucracy's policy of "restraint" in wage negotiatiors and the persistence of unemployment led in the long run to undermining the bureaucracy's positions of power as the monopolistic seller of labor power. The accumulation of evidence that the government was helpless in dealing with a million unemployed, the announcement of further dismantling of the social security system in the government inaugural declaration, the steps taken to grant the employers new tax breaks, the regime's promise to eliminate the pension deficit, and the change in the expectations of the working class in the current round of contract negotiations all combined to confront the bureaucracy with the laws of the market. Economic upturn: at the expense of the workers After two years of crisis and promises of recovery, the upturn has finally arrived. But prospects are more than somber. This situation is unprecedented in the history of West German capitalism. There are still a million unemployed and the rate of inflation, which had declined, tumed up again in December. Things were
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GERMANY different after the First West German recession in 1966-67, and so were the expectations of the Social Democrats in the party and the trade unions. In 1966-67 the inflation rate fell to 1.5%; in 1976 it was 4.4%. Unemployment declined from 300, 000 in 1968 to 170,000 in 1969, while in 1976 it was one million and, according to the most optimistic estimates, it will be around 900, 000 for 1977. Planned investments have not been made, even though the rate of profit has risen strongly (15-20%). The reason is this: present production capacity of capital is utilized at an average rate of less than 90%. The increase in the profits of capital was generated primarily by a 3-4% decline in real wages and by an exceptionally high increase in the productivity of labor. Thus, according to official trode-union statistics, the wage cost per ton of steel in 1976 declined 20% compared with 1975. The Volkswagen trust even succeeded in eliminating more than 20,000 jobs in 1975 during a crisis that had resulted in a loss of 1, 000 million marks. During the years 1968 and 1969, respectively 35% and 50% of employers stated that their central objective was to increase investment. In 1976 this percentage had declined to a bare 18% and it will be even lower in 1977. Thus, It cannot be asserted that the Social Democratic led government has kept its promises. The number of unemployed again rose to more than one million in December 1976 and a further extension of the length of unemployment is in sight. As of the end of September 160,000 people hod been unemployed for more than a year, 30,000 more than at the end of May. In the space of one year 26,000 people entered the category of those who had been unemployed for more than two years. Finally, some 38, 000 people are rapidly approaching this category. The income losses of workers on long-term unemployment amount to 45%. Important differentiations exist among the unemployed between workers and white-collar employees and above all between men and women. The number of white-collar workers unemployed is rising continually. The figure was 361,000 in May 1976 and rose to 383, 000 by September 1976. But the unemployment figure for "industrial positions" is also going up. Thus, the upturn has clearly weakened in various economic sectors. In the machine-building industry the slight growth rate is due above all to exports. The steel industry has been in stagnation since the middle of the year and is being sustained only by demand from the automobile industry, which is now undergoing a flourishing development and is thus shielding the steel industry from collapse. Growth is close to zero in the chemical and electrical industries. And the "official figures" are deceptive. The annual "expert report" delivered by a commission convoked by the government concluded that the real rate of unemployment was about 9%. This was based on the concept of "real potential employment"; it is a figure which includes those who are no longer prepared or feel it discriminatory to go to unemployment offices or welfare; after being unemployed for more than one year, they no longer have the right to unem22 ployment compensation. And this still does not include the immigrant workers who have been expelled from the countryIn spite of this situation, the federal government has openly come out against "measures to reduce the workweek. " It is hiding behind an "expert report" on rationalization entitled "Against Rationalization. " As for unemplayment of women, the only thing being proposed is to create some part-time jobs in social services. And as a consolation for the trade unions, a 1,000 million mark investment program has been planned, the implementation of which is to be accelerated in the wake of strong criticism. But the most alluring aspects of this investment program have not yet been carried out. In essence, what is planned is:
*Construction of water purification stations on the
Rhine;
*Elimination of dangerous areas on the highways;
*Cleaning up the urban centers through construction of parks and anti-noise shelfers. Thus, the most trumpeted projects will create very few new jobs. In Fact, previous experiences with such projects indicate that the cities and municipalities, already in debt and still short of money, will require federal financing to make these investments. These projects profit mainly the most advanced sectors of the construction industry, sectors whose technical development is most sophisticated and which consequently use little labor and were scarcely affected by the general crisis of this industry. Finally, no important group of unemployed workers (women, whitecollar workers, or older workers) will find jobs thanks to these programs. Schmidt's promise that the "future task of the government is to assure the return to security and full employment" (from the government declaration) has already gone up in smoke. Message of the government declaration In the declaration of his second government Schmidt unmistakably emphosized that the policy he had followed during the crisis would be continued during the "uptum." The message of his government declaration was the call upon the working class to reconcile itself to a further decline in social benefits, while new improvements in tax policy were held up for the employers. In his attempts to conceal this fact, the chancellor resorted to hoary Christian charity, along these lines: In the past, the reform policy of the SPD had lifted the workers out of the depths of social darkness; now it is time for the workers to swallow their pride and prepare themselves to sacrifice for others. Exactly who these "others" are has long since been made clear by the subsidies granted the employers through cuts in social spending. True,
the increase of the sales tax (which amounts to a 1.5% inflation rate for wage-earning households) was pestponed to January 1, 1978, but the promised improvements for the working class (such as the increase in the child allowances) were linked to this same timetable. But in spite of a continuing uptum, the employers will enjoy further easing of their tax burden, with "certain discounts in the realm of non-profit-related taxes. " After the giveaway of the "corporate tax reform" enacted under the previous parliament, property taxes are now to be lowered, and the trade tax will be reduced. That this is an outright gift was recognized even by Das Hande Isblatt, house organ of big capital: "Hopefully, Schmidt will not expect any increase in investment as a result of this gesture. Thus, while the Social Democratic voters had expected a change, Schmidt ruled out any change. The tax burden on wage-earners now operates in such a way that of every mark they are paid, less than half will remain after taxes and social security payments. Attempted pension fraud The chancellor's crudest error was undoubtedly on the question of pensions. The need to reorganize the situation of pension insurance (West German pride and joy in the social realm) was an open secret even before the October 3 elections. According to the estimates of the Union of Old-Age Pensioners, the 1976 deficit amounted to 7,000 million marks; for 1977 if is expected to rise to 12, 000-15, 400 million marks. Accumulated reserves are also on the decline: 34,000 million in 1976 and an estimated 17, 000-18, 000 for 1977. Even on the basis of the most optimistic projections (yearly wage increases of 8%, decline of unemployment to 2.5% by 1990), the deficit will stand at 10,600 million marks by 1980 and will rise to 160,000 million marks by 1990. A 10% increase in pensions had been planned for mid1977. During the election campaign, the SPD tried to present this payment as assured and claimed that the general situation of pension funds was not at all perilous. ("There are only a few problems, " said Schmidt.) It was proclaimed: "Pensions remain secure, for the SPD represents the social conscience of the nation. " And the minister of labor even announced to elderly voters: "Let's not mince words. Pensions. will be raised on July 1, 1977." Then, two days before the government declaration, the bomb was dropped. Without prior vote by the SPD's Bundestag fraction or the party leadership, without informing the heads of the trade-union bureaucracy, who hours before had been presented with the coalition agreements, the chancellor announced that the pension increase would be postponed for half a year. But a gross miscalculation had been made. The "rebellion of the pensioners" led to a rebellion against Schmidt within the party itself and within the trade-union bureaucracy as well. Overnight they challenged the big "magician, " who himself became confused for the first time and confessed, "This is the worst shock since the 1974 government change. " The pension fraud had been too gross for an orderly retreat to be mode. The retreat hod to be just as cowardly and overhasty as the original decision had been bold and apparently unchallengable. Down the drain went Minister of Labor W. Arendt, last remaining top-ranking figure of the "Brandt era, former trade-union chairman and (for the trade-union bureaucracy) guarantor of the privileged relations between the trade unions and the SPD government. Down the drain went any improvement in the Schmidt government's relations with the trade unions. The naming of a new minister of labor without consultation with the trade unions coused Vetter to comment: "From Adenauer(!) to Brandt things were different. During that period all the ministers of labor were designated through a discussion, if not an agreement, with the unions. This was the minister who, because of his extremely close relations with the trade unions, had always come from our own midst... The new minister of labor does not have such credentials. He will thus surely not have an easy time of it." And the measures for reorganization of the pension system that have now been decided on will open up new financial gaps in the health fund and unemployment compensation fund. Measures which will lead to an increase in health insurance payments (of about 1.3% as of now) and unemployment insurance contributions. Measures whose main burden will be borne by the wage-earners. Measures which have been characterized as "patchwork" by all experts and which will open up the prospect of still other measures of reorganization: reduction in the growth rate of pensions, abolition of contributions of family members, private payments for hospital costs. Change in working-class consciousness But the changes in West Germany are not limited to objective developments and the accumulation of blunders by the chancellor. There is ferment in the West German working class, whose passivity during the crisis brought
GERMANY the government over the hump. The focts clearly. confirm that the wage restraint of past years has not at all persisted. The altered relations of the working class to the SPD were alreody apparent during the election campaign, when there was no mobilization whatever for Schmidt, in contrast to the mobilization that occurred for Brandt in 1969 and 1972. The workers went to the polls not to vote for Schmidt's pro-employer policy, but rather to reject the openly reactionary appeal of the CDU/CSU. In this situation, the workers are once again turning to strengthening the elementary organizations of struggle, the trade unions. The level of expectations in trade-union policy has risen noticeably since the elections. In contrast to the years of crisis, the trade-union bodies on the factory level are now preparing to raise heightened demands in wage negotiations. Demands which nearly always exceed the official demands in material terms. The trade-union bureaucracy has taken note of this alteration in the attitude of the working closs and is now seeking, for obvious reasons of self-interest, to cover up the role they played through their policy in the past. They have ceased to parrot the government's line that there is a connection between low wages and high profits which creates jobs, and they are therefore coming under the pressure of the workers' desire to "make up for losses" on the wage front. But this is only one side of the coin, for the bureaucracy today is no more prepared for a policy of tough defense of the interests of the union membership than it was in the past. In the metalworkers union (IG Netall), this was shown quite clearly in the unfolding of the wage negotiations in the steel industry during November and December 1976. In spite of the verbal rodicalism of the demands, the bureaucrats finally accepted a wage increase that falls within the state guidelines and also gave up on essential "secondary demands" (rises in premiums for shift work and special work) which, because of the economic situation of the employers, had been put aside in agreements concluded during the crisis. This settlement was concluded af a time when mobilization and token strikes had reached a real highpoint, that is, at a time when the union's negotiating position was improving. And here we come to the deeper reason for the trade-union bureaucracy's refusal to act against the government. The combination of the crisis and the bureaucracy's lining up behind the policy of the Schmidt government has meant long-term disadvantages for the apparatus, but it has resulted in short-term advantages as well. On the basis of the policy of stability and the "Freezing" of class controdictions, the trade-union bureaucracy had succeeded in sharpening its control over the rank and file, eliminating the weakness of the apparatus that had become apparent during the initial phase of the new rise of workers struggles in West Germany, and halting the process of consfruction of a layer of class-struggle vanguard elements within the rank-and-file bodies of the unions. 24
If the bureaucrats want to stabilize these "successes, "
they will have to get some help from the government.
And here lies the nub of the contradiction. The unemployment and the trenchantly pro-employer policy of the Social Democratic led government are directed not only against the working class, but also, to a certain extent, against the self-interest of the trade-union bureaucracy. The bureaucrats are prepared to continue to maintain peace and quiet (and order) in wage policy, but under the conditions created by government policy they stand before the working class empty-handed. The government's policy does not leave them room to do this. They are thus forced into conflict. In accordance with this calculation, in none of the many interviews with trade-union leaders does one find even the most modest reference to the notion that defense of the interests of the workers against unemployment is a central task of the trade-union organizations today. For this would amount to a class policy that takes no account of the interests of the employers and would trigger a dynamic that would be incompatible with the policy of stabilizing the system. In order to ease the contradiction with the membership, Vetter (and the other trade-union leaders) directed the demand for a fight against unemployment to the government. The union bureaucracy is primarily concerned with placing a new accent on the relations between the SPD government and the unions. For some time now the SPD government's recipe for success in obtaining the passivity of the bureaucracy has been based on binding this bureaucracy to the government's policy. Not on the basis of coercion, but through appropriate concessions, reforms, small improvements, and promises of reform. That was how the basis was laid for implementation of the policy of passivity. This relationship become a one-sided one under Schmidt, and this was accepted during the crisis. Schmidt's policy was determined not on the basis of "privileged relations" with the union bureaucracy but instead on the basis of mutual agreements with the bourgeois Free Democratic party (FDP). Vetter's attacks on the federal government and the chancellor represent nothing other than an attempt to restore these privileged links with the SPD os the leading government party. This is, moreover, the only possibility open to him as a faithful SPD ranking bureaucrat. Response of the government and the bureaucracy Up to now, however, this attempt has been a failure. Only in regard to the above-mentioned "Investment program" has a quick arrangement been guaranteed. On the main question, though, they made no progress. In response, Schmidt has not stressed the "traditional" solidarity of the SPD and DGB as he has on other occasions, but instead the ties among "employers, employees and their trade unions, and responsible politicians." The plans for reduction of the workweek would be shelved: "The federal government sees no opportunity for a legal initiative on shortening the workweek. This matter will remain in the hands of the negotiating partners."
The federal government's rejection of the "Vetter plan" was, in part, grist for the mill of the leaders of the individual unions. They could not go before their members during a negotiating period with Vetter's proposal for a reduction of the workweek without wage compensation, for in the best of cases this would amount to a stagnation of real wages. But their refusal to do this is quite different from a positive contribution to maintaining real incomes. The bureaucrats' slogan of "no renunciation of wage compensation" in fact amounts to "renunciation of shortening the workweek." The discussions about this should continue, for the federal government's rejection of the "Vetter plan" and the rising controdictions around this question have now placed this discussion on the agenda in the trade-union bodies. And not in the "medium term, " but as a present task of struggle for the unions. Beginning of process of differentiation Nevertheless, the conflict between the trade unions and the SPD government, rooted in this controdiction, represents a positive point of departure for class-struggle openings, provided the lines of division can be seized upon and greater political maneuvering room can be won. This opportunity arises above all in the contract negotiations now going on, in which the official union demands fail to deal with the real questions that are posed (unemployment, decline of real wages, speed-up, cuts in social spending, tax problems). There are possibilities here, if the struggle does not remain simply on the level of the percentage of wage increases. That is, if the questions posed are dealt with and grasped with the aim of rooting in the consciousness of the working class the necessity of an overall program of trade-union struggle for jobs, wages, and decent conditions. One further consequence of this first rift in the bloc between the union bureaucracy and the SPD already bears watching: differentiafions within the bureaucracy. There should be no illusions in this type of differentiation, nor is there any question of "staking" anything on them. But the controdiction between that part of the bureaucracy that wants to stick with Schmidt through thick and thin and that section which, out of motives of "self-preservation, " enters into conflict with the government improves the starting position for a class-struggle turn. In the realm of wage policy, it also leads to a breakup of the monolithic bloc the bureaucracy had constituted during the crisis. No longer fully master in its own house, the bureaucracy will have greater difficulty playing its stabilizing role during the contract negotiations. What it all amounts to is that every open contradiction with the government increases the workers' level of expectation in the results of the contract agreements and narrows the bureaucracy's maneuvering room, In the metal industry, for example, In spite of the lack of a course of determined confrontation with the employers' association, the negotiations are extremely dangerous, In fact, the possibility of a strike is not completely ruled out, even if the bureaucracy drags its feet in giving a green light to the mobilizations that are already being prepared. This creates a dilemma. Such a strike, coupled with the government's inability to negotiate with the unions, would have fundamental repercussions on the political structure of the Federal Republic of Germany. A frightened retreat by the bureaucracy in face of a combative confrontation (which is what acceptance of wage agreements within the official guidelines would amount to) would give a new impetus to the discussion in the unions. But Vetter's attacks will have effects not only in the unions but also in the SPD. The rallying of the party behind Schmidt during the election confrontation (for example, the capitulation of the Jusos, the Young Socialists, to the Schmidt line) threw the party into a visible internal organizational crisis. A crisis which rendered the party powerless during the election battle. The situation has been described this way by someone who should know: "It was every man for himself, the one taking to the newspapers to separate himself from party opportunism, the other utilizing the possibilities for advancement tailor-made by the party itself. " (A. Klönne in Links, No. 84.) The "one" was a reference to the old SPD leftist J. Steffen, who, in a provocative interview at the beginning of December, altacked the leadership of the so-called "Basic Program Commission" of the SPD, which drafted the SPD's longterm program for the workers. In this interview, Steffen (who is still a member of the party leadership) said of Schmidt: He thinks and acts as a pure technocrat and seems not at all to notice that "he simply rubber stamps what has already long since been initiated by industry and interest groups of capital. " But this was before the "dismantling" of the social security system. It shows that there is o potential for criticism in and around the SPD. Every instance of resistance to Schmidt thus undermines his position within the SPD, which in turn opens new possibilities for any internal criticism under the cover of trade-union criticism. The rallying of the Social Democratic party and the trade-union bureaucracy behind Schmidt's conceptions during the crisis created a vacuum on the left, which was constantly fueled by the passive acceptance of the government's policies; at the same time, because of the muting of important social contradictions, there was a "blunted potential." The "rifts" that have now opened up in the pact between the trode union bureaucracy and the SPD government do not yet mean a general turn, for the connection remains solid. But they have opened the door a crack. This opportunity must be seized upon. Not through abstract denunciation or attempts to turn every rejection of Schmidt's course directly into gains for this or that organization, but through putting forward a program of struggle that responds to the problems posed, a perspective of mobilization of all forces that are beginning to realize the necessity for an alternative. January 16, 1977
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