[The following article appeared in the December 22 issue of Inprecor, a fortnightly news bulletin published by the United Secretariat of the Fourth International.]
As in other capitalist countries hit by open crisis, the Spanish government is trying to impose an austerity policy on the workers. It justifies this in the same way as its counterparts elsewhere ("the national economy is in an untenable position"), but it also refers to the exceptional gravity of the crisis in Spain. Spanish capitalism is indeed passing through very difficult times—as may be seen from the constantly rising rate of inflation, the unmanageable balance of payments deficit, the inordinate level of unemployment, and the sharp decline in capital accumulation.
There are further similarities with the crisis in other capitalist countries. The analysis of the bourgeoisie designates the general cause of the situation as the rise in the price of raw materials, above all oil, which is supposed to have given rise to "a transfer of resources" and an "as yet unabsorbed impoverishment of the coun try." And as its immediate cause the intolerable impact of wage increases is cited (although here the bourgeoisie speaks in rather milder terms so as "not to offend the workers'
sensitivity"). Its analysis touches on the special circumstances of the Spanish political situation, but it does not go beyond these vague formulas.
In particular, it neglects to insert the Spanish crisis in the context of the generalized crisis of the imperialist economy; or when it does so, it remains at the level of symptoms rather than underlying causes. It forgets the special structural characteristics of Spanish capitalism inherited from its entire past development. Finally, it overlooks the present rise of class struggle, objectively determined by the superexploitation of the working class in the years of the dictatorship. Of course, it suits the bourgeoisie not to mention the class strug gle, since the government is seeking everyone's cooperation in "saving the national economy in these difficult hours," laying stress on "the sense of responsibil ity of all members of the community." In this, however, a veiled threat is always present: "the consolidation of democracy depends on the outcome."
Before analyzing the economic projects of the Suárez government, we should describe at least in outline the last cycle of Spanish capitalism as well as the precise situation facing it today.
a. There was first a period of growth stretching from spring 1971 to spring 1973. Basing itself on the expansion of the entire international imperialist economy, Spanish capitalism experienced a sharp rise in and capital accumulation. production Gross National Product (GNP) grew in 1972 and 1973 at a rate above 8%, while gross accumulation increased by over 15%.
b. This was followed by a period of overproduction and artificially sustained expansion, running from spring 1973 to spring 1974. Economic activity continued to develop at an acceptable rhythm, even though the crisis of overproduction was already apparent. This artificial maintenance of growth resulted above all from the inertia of the system and the economic policy of the government, which sought to delay the impact of the international crisis lest it exacerbate the class struggle. In 1974, GNP was still growing at a rate of 5%.
c. The period between spring 1974 and early 1976 was one of recession and stagnation. Industrial production fell by 10% between April 1974 and April 1975.
d. The whole of 1976 and the first months of 1977 were marked by faltering upturn and absence of accumulation. Economic activiiy was stimulated above all by the upturn in a number of imperialist countries. But the process of capital accumulation did not pick up. Thus, althongh the index of industrial production rose by 16.5% between March 1976 and March 1977, the rate of growth of fixed capital investment was negative in both 1975 (-2.4%) and 1976 (-1.5%), and is expected to remain so in 1977. Moreover, activity has slowed down since the spring, and the 1977 totals for industrial production and GNP will be much lower than those optimistically forecast at the beginning of the year.
The most serious problems confronting Spanish capitalism are the following:
• Inflation. Throughout the cycle we have just described, whether in the phase of expansion or that of contraction, the rate of price increases continually worsened. The cost of living index shows the following progression:
7.3%
14.3%
17.9%
14.1%
19.8% 13.2%
1977 (first quarter)
It is feared that the situation will deteriorate still further in the coming months, since the impact of the last devaluation of the peseta is beginning to make itself felt.
• Unemployment. It is estimated that the number of unemployed has passed the million mark for an active population of more than 13.4 million. In other words, the current level is 7.5%. During the phase of expansion, the industrial reserve army practically disappeared, emigration to the European capitalist countries functioning as a kind of safety-valve. But unemployment has rocketed since the onset of the crisis, fueled above all by the return of those working abroad, the entry of students leaving school onto the labor market, and the fact that petty-bourgeois layers have been compelled to work for others in the present economic situation. Without doubt unemployment is still rising as a result of layoffs in crisis-stricken enterprises.
• The balance of payments deficit. The current account balance has been in the red since 1974, despite the internal crisis and devaluation of the peseta. This deficit passed from $3.2 billion in 1974 to $3.5 billion in 1975 and $4.3 billion in 1976. This latter figure represents 4.2% of GNP, a level unsurpassed in any other imperialist country. In order to cover this deficit, it has been necessary to reduce foreign currency reserves and run up such enormous debts with international imperialism that further credits become more and more difficult to obtain. (The foreign currency debts of the Bank of Spain exceed the total exchange reserves.) This has resulted in a radical change in the structure of the capital balance: direct foreign investment in Spain has declined, while credits now make up the greater part of foreign capital inflow.
• The extremely precarious situation of capitalist enterprises. The fall in the rate of profit provoked by the crisis of overproduction is combined with the combativity of the workers movement, which has succeeded in defending itself against the effects of inflation despite the massive unemployment and the protracted character of the crisis. The slight upturn that occurred was not enough to engender an
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appreciable improvement in the situation of the capitalist firms. This explains the low level of accumulation. It must be taken into account that the crisis has affected capitalists as a whole in a very uneven manner, and that the large firms emerge more solvent than small and medium-sized ones.
Economic Policy of the Bourgeoisie
We must now bring out the characteris. tics of the economic policy pursued by the Spanish bourgeoisie over the last few years as well as the results that it has obtained. This will enable us to look at the most recent bourgeois plan to meet the crisis, one which is the most theoretically developed and which has been born in the more favorable political circumstances of a more "democratic" government.
One point of major importance emerges from the experience of the last three years: the bourgeoisie has not been able to impose a policy on the working class that would serve to overcome the crisis on a capitalist basis. This conclusion is fully confirmed by the fact that since November 1974 (when the bourgeoisie openly recognized the existence of a crisis) no fewer than seven unsuccessful economic programs have followed one after the other. The basic reason for this failure was the combativity of the working class, although other factors have played a certain role. It was not possible to secure the complete support of the reformist workers parties, which relied on a measure of working-class mobilization in order to gain a foothold in the political arena; the successive governments had a "transitional character"_ which prevented the elaboration of a longterm policy; the closeness of elections hardly favored the adoption of tough mea sures against the workers, etc. Moreover, the very succession of bourgeois plans to meet the crisis confirms its seriousness and complexity.
All the measures adopted in this series of plans may be grouped under three headings: those intended to promote capitalist profits; those supposed to partially compensate the workers for the serious effects of the crisis; and those designed to improve the position of Spanish capitalism in interimperialist competition.
In the first category may be placed wage-freezes and the lifting of restrictions on layoffs and on the prices of a whole range of products: in other words, measures that attempted to soften the blow of the oil price rises by reducing mass consumption. However, the available data suggest that, on the whole, the workers successfully protected the purchasing power of their wages, even if the results vary a great deal according to region, sector, and enterprise. By contrast, the authorization of layoffs caused a marked rise in unemployment.
As to the second category (measures that were to compensate the workers), not a single one went further than the paper on which it was written. Public investment projects intended to absorb some of the unemployed were never realized; price controls were always exceeded; and there were never any social improvements.
The third category we mentioned included the devaluation of the peseta and the rise in customs duties.
"The government is seeking to place the Spanish economy on the road of stable and lasting growth, and it is convinced that the achievement of this goal requires a process of costly and continuous adjustment allowing the two basic disequilibria to be overcome: namely, inflation and the balance of payments deficit. Unless these are corrected, it will be impossible to clear the way for the economic future."
The government's statement of intention contains the most important characteristics of its project to lift Spanish capitalism out of the crisis in which it is currently mired. These were subsequently confirmed by the government's emergency plan presented to the new Cortes and by the various measures that it has taken. First, the government claims the right to solve the problems of the bourgeoisie (inflation and the external deficit) while completely forgetting those that affect the workers, such as the high level of unemployment raised still further as a result of the government's measures. Second, the regime claims to achieve these goals through an austerity policy hidden behind the euphemism: "a costly and continuous process of adjustment." Finally, the government hasn't the slightest intention of attacking such every. day workers' problems as health, education, and so on; it simply postpones their solution to better times (when the economy. will again be on the road of "stable and lasting growth"?). In short, the government intends to solve the economic crisis of Spanish capitalism at the expense of the workers. All indications are that it will not succeed.
The government's analysis of the situation may be summed up as follows. The crisis has exacerbated three problems: the balance of payments deficit, inflation, and unemployment. The external deficit is rooted in the oil price increases, which impoverished the country by forcing it to export more in order to import an unchanged quantity of oil (In a recent statement on television, Professor Fuentes Quintana even spoke of "brutal impoverishment," giving the analogy of a family which has to pay 25% more for its purchases without obtaining more for its sales on the market.) In turn, inflation affects the external deficit by making foreign sales more expensive and difficult.
Inflation is supposed to have fairly complex origins, although they are in the last analysis the responsibility of the workers. The rise of consumption at a faster rate than production ever since the start of the crisis indicates that "we are living beyond our means"-a situation that maintains excessive spending and brings about a rise in prices. Next, "inordiwage increases," supposedly expressed in the growth of the share of wages in national income from 51% to 57% between 1973 and 1976, has provoked a fall in "the operational surplus" and a rise in prices. The fall in "the operational surplus" has in turn caused a fall in investment and consequently a growth in unemployment. As can be seen, it is the workers who are held responsible for all manner of evils because they have fought for excessive wages and consumption levels. The priority task must therefore be to combat inflation through an austerity plan capable of restoring profits to the level necessary for growth.
In reality, things are not so simple. Let us start with the balance of payments. The government reduces the impact of the crisis of the international capitalist economy to the oil price rise, forgetting all about intensification the interimperialist rivalry, the structural factors involved in the lack of competitiveness of Spanish capitalism, and so on. It would have us believe that national income fell overnight by 25% and that this is the reason for the inevitability of an austerity stage requiring the cooperation of the workers.
However, the "25% loss of income" is a pure myth: between 1973 and 1974 (that is, before and after the oil price rise) the balance of payments deficit rose by only 4% of GNP. And the workers have already paid for some of this loss in national income. Whereas the rate of growth of their consumption averaged 6% per annum between 1965 and 1974, it fell to 3% in subsequent years (i.e. to a rhythm less than that of GNP). In other words, the share of workers' consumption in GNP has already declined rather than grown. The official explanation for inflation rests on similar fallacies. In national statistics, the heading "operational surplus" covers not only company profits but also the income of non-wage-earning classes such as small peasants and traders, the liberal professions, ete. Much of this income, then, is derived from non-wage-earning labor which, as every indicator confirms, has been hit hardest by the crisis.
There can be no doubt that capitalist profits have also been hit by the economic crisis, although not to the extent suggested by the rising share of wages in the national income. Moreover, the fundamental cause of this fall in capitalist revenue is the capitalist economic crisis itself. If GNP had grown since 1974 at an annual average of 6% (which is still less than the rate of previous years), then the share of wages would have remained 51%. (We should add that the slight rise in the share of wages in national income also reflects the growth of the share of wage earners in the active population.) Talk of "inordinate wages" is rather strange when the workers have done no more than defend themselves against inflation. Nor can it be said that "we are living beyond our means" when the rate of growth of consumption is less than half the rate of the past.
The centerpiece of the government's plan is the freezing of wages. In return, it offers a minimal tax reform of no use whatsoever to the workers. Like all plans of this type, it also contains measures to correct the balance of payments deficit: above all, a further devaluation of the peseta and considerable credit restrictions which add up to a veritable stabilization plan.
Austerity Policy Based on a Austerity Policy Based on a Drastic Reduction in Real Wages
The government's struggle against inflation is based on the reduction in real wages that it intends to negotiate with the trade-union federations, using the mediation of the reformist workers parties (the Moneloa Pact). This is at once the most delicate and the most important component of the plan. An immediate rise in capitalist profits depends on its achievement. The two blades of the scissors are the cost of living and nominal wages.
Let us begin with the cost of living. The government has set in motion a policy which tends to accelerate the rate of inflation. According to its analysis, the level of mass consumption must be brought into harmony with the impoverishment of the Spanish economy that followed the oil price rises. The devaluation of the peseta will have an inflationary impact of at least 5%: it will release a wave of price rises that the recent decree on price controls cannot and is not intended to halt. Furthermore, the need to reduce imports of energy and other products provokes a sharp rise in the prices of many goods such as gasoline and petroleum derivatives (especially plastics), coffee, soybean oil, ete., which all have an important place in the consumption of the working masses. These price rises, which are often directly produced, as in the case of gasoline, by government indirect taxation, brought about a rapid acceleration of the inflationary process during summer 1977.
The other blade of the scissors is "moderation in the growth of earned income." In its negotiations with the trade-union federations, the ministry of labor floated an idea that was sharply contested by them, because it would have left no room for maneuver. What was being offered was "linear," across-the-board wage increases of 50,000 pesetas a year ($600), corresponding in the ministry's estimates to a 17% increase in the wage total. The government's plans restrict this rise in the wage total to the forecast rate of inflation, which is much lower than the actual rate.
In the last three months of 1976, the average monthly industrial wage was 28,
Wage Earners
Monthly Earnings
(in pesetas) below 8,000 8,000-10,000 10,001-15,000 15,001-20,000 20,001-25,000 25,001-30,000 30,001-40,000 40,001-60,000 over 60,000