DOWNTURN IN WEST GERMANY AND ITS POLITICAL CONSEQUENCES
By Gerhard Werner
[As foreseen in the analysis below of the West German political and economic situation, which was written in February, the Social Democratic party congress, which opened in Nuremberg March 17, was marked by the reappearance of a strong opposition from the left.
[This political development made a sensation in Germany. In its March 25 issue, Der Spiegel began its lead article: "A new wave is coming out of Nuremberg.... It is shaking the Social Democratic establishment and threatens the Red-Black power monopoly." (The reference is to the "Grand Coalition" of the Christian Democrats and Social Democrats.)
[The resolution of support for the coalition which the party leadership submitted to the congress (supplemented by a simple resolution of support for the Socialist ministers participating in the government) was passed by an embarrassingly narrow margin. Der Spiegel noted: "For the first time in the postwar period almost half the delegates refused to obey their leaders and heeded instead the blandishments of honest trade unionists and old-line socialists in the party."
(The right wing of the party also received a rebuff when Klaus Schutz, the mayor of West Berlin was defeated in his attempt to gain a position in the national party leadership. Schutz won notoriety for his unsuccessful attempts to ban the February 18 demonstration in Berlin against the Vietnam war and for his general red-baiting. After his failure to prevent the February 18 demonstration, he organized a prowar, anti-Communist counterdemonstration the following week.
[A large proportion of the counterdemonstrators were city employees mustered by the city government. They beat students and "suspicious lodking" onlookers. In fact, such a wave of violence accompanied this officially organized demonstration that many liberal commentators in Germany have compared it to the Nazi demonstrations.
[The Nuremberg Congress was also noteworthy for the militant student and youth demonstration held there against the opportunist and right-wing policies of the party leadership. Foreign Minister Willy Brandt was surrounded by demonstra-— tors as he entered the congress and other party worthies had to be escorted everywhere by phalanxes of police.]
* * *
Frankfort
A depression, not a recession, is what the Trade Union Institute of Economics has termed the present economic decline in West Germany. In 1967, for the first time in West Germany since the second world war, an absolute, though slight, decline of 0.5 percent of the real national product was expected.
In 1966 existing economic capacity was already sufficient to produce ten billion DMs [4 Deutsche Marks = US$1] more goods and services than were actually produced; and in 1967 unused productive capacity reached thirty billion DMs. The unemployment rate at the depth of the current depression was falsely given as 2.5 percent. In reality it came to 4.5 percent: 400,000 foreign workers were sent back to their countries; almost 300,000 blue-collar and white-collar workers were compelled to accept "early retirement" in order to relieve the labor market, thus shifting part of the cost of the depression from the capitalists to the social security system; and counter to international practice, construction workers receiving bad-weather pay were not listed as unemployed.
At the bottom of the depression, out of thirty-two branches of the economy, only six showed net growth. The national income, which had risen by an average of 8 percent between 1958 and 1966, stagnated for the first time in the life of the Federal Republic
This general depression was grafted onto partial structural crises which had
already gripped individual branches of the economy (coal, steel, textiles, leather, shipbuilding) and particular regions. In addition to the industrially underdeveloped areas which profited less from the so-called “economic miracle" -such as the regions bordering East Germany, the Bavarian Forest region, Schleswig-Holstein, and parts of Lower Saxony -- vast distressed areas emerged in Nordrhein-Westfalen and in the Saar. The decline in coal and steel production and the development of labor-saving techniques, which led to the firing of roughly 300,000 mine and steel workers in recent years, were not accompanied by a planned establishment of new industries for the future. That did not fit in with Erhard's economic theory. *
This theory was entirely suited to the postwar boom in West Germany. After the decartelization initially begun by the Allies, only relatively free competition could root out the unprofitable concerns and give new impetus to the process of centralization. Only thus could the necessary dynamism be produced to assure a leap forward for German capitalism to win itself a place in the sun in international competition.
When, however, the threat appeared of massive collapses of whole branches of industry and of large concerns (coal, steel, Krupp), free competition had to be replaced by state intervention in favor of the capitalists. Otherwise, a profound economic crisis would have become unavoidable. And no industrially developed country can risk the social consequences of such a crisis, as long as it is ina position to avert it.
State intervention at some point in favor of the private economy as well as the stimulation of private initiative through billions in public subsidies and credits became necessary when Erhard cut taxes and enacted costly social reforms in order to win the September 1965 elections. This method -- already successfully employed by Adenauer -- of putting off all needed social reforms until an election year -- at first proved successful for Erhard as well.
It was little noted, however, that as early as 1965 the first signs of the approaching recession were showing up, namely a decline in the production of producers goods. When in the fall of 1966 it became evident what a mass of potential bankruptcies threatened to occur in the event of an economic decline, considering the empty federal treasury,
*Former Chancellor Ludwig Erhard has been known as the father of the West German “economic miracle" and as a classical "free enterprise” economist. -- W.O. the CDU/CSU [Christliche Demokratische Union/Christliche Soziale Union -- Christian Democratic Union/Christian Social Union] had no alternative. It had to drop the "economic miracle man" [Der Wirtschaftswunderman] Erhard as well as its small coalition partner, the FDP [Freie Demokratische Partei -- Free Democratic party] and take the Social Democrats into the government. Only in that way did it dare shift the costs of economic recovery onto the backs of the workers without running the risk that its disillusioned working-class supporters would go over to the SPD [Sozialdemokratische Partei Deutschlands -- Social Democratic party of Germany].
This maneuver was successful to an extent undreamed of even by the CDU/CSU itself. Social-welfare laws passed with the votes of the SPD deputies in the Ehrhard era were repealed out of hand. In intermediate-term financial planning, the social security system was hit by a seven billion DM reduction in federal contributions. Two billion DMs were saved by cutting family allowances. Rents for two million public dwellings were raised by as much as 25 percent. Pensioners were forced to pay another 2 percent on their health insurance from their miserable incomes (which amount to less than 350 DMs for 50 percent of the disabled and aged male workers and 98 percent of the female workers in this category!). The sales tax resulted in an increased burden on the masses through a rise in the price of gas, water, electricity, and the cost of public transportation. Altogether, an increase of 2.5 Sea in living costs is expected in 1968.
This robbing of the incomes of the masses goes hand in hand with princely gifts to the capitalists. Through the revaluation of old equipment accompanying the introduction of the sales tax, the CDU/CSU finance minister magnanimously presented them with 4.9 billion DMs. The Social Democratic economics minister, Schiller (who had been, like Chancellor Kiesinger, a faithful member of the Nazi party from 1943 to 1945, and a Nazi economic theoretician in the bargain) has floated billion-mark loans for use as a contingency budget to stimulate the private economy. Although the capitalists hesitate to undertake new investments in view of their unused capacity, they of course gratefully accept orders financed with public funds.
In the first economic report of 1968, it was proudly stated that an increase of 8 percent in profits is estimated for this year. This was described as especially important for the creation of a climate favorable to investment and thereby for resumed economic growth.
However, another factor is deci-
sive for this "creation of a favorable climate for investment," which is being achieved through an unprecedented indebtedness of the federal government, the states and the local governments. *
In 1967, productivity per man-hour had already risen by 10 percent. Although 600,000 men were expelled from the production process in industry, about the same amount of commodities can be produced as before. Only extraordinarily high growth rates would make it possible to restore full employment. However, one of the greatest concerns of Finance Minister Strauss and Federal Bank President Blessing, who are both direct representatives of big industry, is to prevent an "“overheating" of the economic conjuncture.
Full employment gives the unions and the workers in the shops greater leverage and so must be prevented. Big capital needs a reserve army which can be used to bring pressure against wages and salaries. There were nonetheless 675,000 unemployed in January 1968, and a projected average unemployment rate of 311,- 000 is even included in Schiller's goal projection for 1968. But since in the meantime Strauss and Blessing, with the help of the CDU/CSU majority in the cabinet, have denied Schiller the use of stronger economic stimulants, it may be supposed that unemployment will exceed that of Schiller's goal projection.
An increase in hourly wages of 4 to 5 percent on an economy-wide average has already been included as a guideline figure in the yearly economic report by way of precaution. This goes hand in hand with an officially estimated increase in prices in private consumption of 2.5 percent. The full extent of the increase in the capitalists' wealth and their share of the national income, brought about by the coalition government in which the Social Democrats are participating, can only be appreciated once it is considered that a real growth in the national product of 4 percent (nominally this is more than 6 percent) is planned, that productivity per man-hour already rose in 1967 by 10 percent and will certainly rise still further in 1968.
There is no question that it is possible to bring about a new boom in the economy by transferring the cost of the depression onto the workers. The stock market has already anticipated the coming
* The federal government's debt on the securities market reached 26.3 billion DMs (440 DMs per inhabitant) in 1967; the debt carried by the states reached 14.6 billion and that of the local governments, 30.7 billion at the end of June! (Cf. "Bericht uber die 318. Sitzung des Bundesrats vom 15.12.1967," pp. 288 and 291.) boom with fantastic price increases, which for some stocks have reached 40 to 50 percent, and indeed, in the case of Daimler, a 100 percent rise in a single year.
The political consequences of this depression and the attempted method of overcoming it will be extraordinarily grave, however, not only for the SPD but for the Federal Republic. It can be counted on already that in the coming 1969 Bundestag elections some five million voters will change parties. To the right of the established Bundestag parties, which account for more than 95 percent of the votes -- the CDU/CSU, the SPD, and the FDP -- the neo-Nazi NPD [Nationaldemokratische Partei Deutschlands -- National Democratic party of Germany] will gain ground. To the left an electoral hodgepodge will operate, though with much less success than the NPD, and take votes from the SPD primarily.
Probably those petty-—bourgeois elements who voted for the SPD because of its foreign policy or because they felt safe with it as an opposition peoples party will now turn their backs on it and return to the FDP -- although they may go to the CDU. Many old Social Democrats will probably incline to abstention out of protest against the party's betrayal of the illusions they harbored about it. For all these reasons, it is certain that the SPD will lose votes for the first time since 1949.
The first test is already before it in the state legislative elections in Baden-Wurttemburg on April 28, and not even the SPD state chairman Krause has any illusions about their outcome. These elections will also provide the proof that in 1963 the SPD owed its 3.5 percent vote increase to the metal strike and lockout which stirred even this backward provincial area, which was then quite stable economically. At that time, however, the SPD had counted on a greater increase and put the blame for its failed hopes on IG Metall [Industrie-Gewerkschaft Metall -- the Metal Workers Union].
How will the SPD leadership react to an electoral defeat after having depicted its steady vote increase as primarily a result of the farsightedness it showed in developing the grand ideas of the Bad Godesberg program and the "peoples party"?* Can the probably unavoidable change in leadership after an electoral defeat in
* The Bad Godesberg Party Congress marked the culmination of the long rightward movement of the SPD. It disavowed nearly all the socialist principles still formally part of the party program. The concept of the "peoples party," or a nonclass democratic party ‘of all the people, symbolized the SPD orientation that came out of this congress. -- W.0
1969 again be carried out through a behind-the-scenes battle, as was the ouster of Ollenhauer at an earlier time? In view of the altered circumstances -- for which the student and youth revolt and the conflict between the SPD and a sec-~ tion of the unions have been in no small measure responsible -- this seems com— pletely excluded. The SPD congress in Nuremberg should show that the party has recovered its voice, that an internal opposition will not meekly defer to the overbearing dictates of the top leadership issued from the speakers' rostrun.
The political polarization to the left and right is not only taking place outside the CDU/CSU, SPD, and FDP but is passing through these parties. The unrest on the left in the SPD is evident. In the CDU/CSU the Strauss wing* is rebelling both against the new foreign policy [accommodation to the U.S.-~Soviet détente and seeking contacts with the East European countries] and against the draft program of the CDU which by their lights contains too much social romanticism. The FDP as always is split between its national conservatives and "left" liberals -~but it now gives the latter significantly more leeway.
Although they are only "relatively unbinding commitments...served up conveniently in a preelection year" (Neue Zurcher Zeitung, January 9, 1968), the new CDU draft action program and the "Social Democratic Perspectives at the Turn to the Seventies" do reveal a "spiral to the left." This is all the more remarkable because it was to be feared that the big parties would engage in a contest of nationalist rhetoric with the NPD in order to try to win back the voters going over to that party. However, with its avowal of a policy of détente the CDU has now -- even if very cautiously -- made the turn imposed on it by the peaceful coexistence endeavors of the Soviet Union and the USA.
Moreover, both the SPD and the CDU want to take the wind out of the sails of the left with progressive education and social plans for the future. Apparently this seems advisable from the standpoint of their electoral tactics, which are based on public opinion polls. In any case, denunciations of the Great Coalition [as the Christian Democrat-—Socialist coalition is called] as the final step in the formation of a regimented society have proved incorrect. This danger has in fact moved nearer as a result of the Great Coalition, but it is not yet an accomplished fact and can still be averted.
* Franz Josef Strauss, leader of the CSU, the reactionary Bavarian wing of the CDU/ CSU. -- W.O.
The "Social Democratic Perspectives
at the Turn to the Seventies" resembles
that celebrated barbershop sign which ap-
pealed to customers with the promise "Free
Shaves Tomorrow." However, it has a seri-
our motivation behind it -- the aim of
capturing a left opposition which for the
first time in years is clearly winning
ground in the party:
-- Under pressure from the unions
the SPD leadership has had to retreat on
the issue of the Emergency Powers Law. *
-- Contrary to the desires of the
party chiefs, attempts to form a trade-
union or working-class wing in the SPD
have been carried further in the most
diverse forms.
-- An opposition is showing up in
delegated conferences on all levels,
which is made up partly of young men who
have not stepped forward before.
-- Part of the social unrest has
been focused directly against the party
(the miners' demonstrations in Dortmund-
Huckarde with the slogan “Kuhn and Schill-
er -- Mine Killers" ["Kuhn und Schiller --
Zechenkiller" -- referring to recent mine
closings]).
-- The Jungsozialisten [Young 5So-
cialists] have become as restless an ele-
ment as the students were before the ex-
pulsion of the SDS [Sozialistischer Deut-
scher Studentenbund ~-— German Socialist
Students League]. In their federal con-
gress in Mainz [December 10, 1967] the
Young Socialists not only came out in
favor of recognition of the Oder-Neisse
line,* against the Emergency Powers Law,
and against the Vietnam war; but they even
declared that an "understanding with the
German Democratic Republic (East Germany)
should not run aground on the question of
de_ jure recognition of the East German
regime."
~~ The tension between the party
and the unions cannot but be heightened
by the attempt of the SPD Bundestag frac-—
tion chairman Helmut Schmidt to put the
blame on the unions for the balkiness of
the SPD voters. ("No one of us can doubt
that the unions create discontent among
the SPD voters," he wrote in Sozialdemo-
kratie und Gewerkschaften. )
The union leaders themselves are
threatened by a conflict with their men-
* The SPD leadership had been supporting
a Christian-Democrat-sponsored bill which
would give the government dictatorial
powers in the event of an emergency, in-
cluding in matters of "labor discipline."
QO.
* The postwar border with Poland. -- W.O.
~31l1-
bers. They have failed to carry out the trade unions' function of "safeguarding" the interests of the workers in time of depression. There is little doubt that the unions' prestige has suffered because of this in the most recent period.
Only where determined defensive struggles have been waged, as in the Hessian rubber industry, has trade-union consciousness been strengthened. Only there did the workers decide by a 91.3 percent vote to accept a contract resulting from a strike. On the other hand, in the IG Metall votes in Baden Wurttemberg and Hesse -- where in both cases mobilization maneuvers were resorted to without letting matters come to a strike -- the compromise which emerged from the bargaining was accepted by only a 65 percent vote.
The workers' reaction was weak in the first phase of the depression because only marginal layers and not the hard core were hit by layoffs, unemployment, short shifts, or reduced social benefits. However, their determination to defend their positions increased after the strike at Hanomag in early 1967. For various reasons, the workers stopped work at Continental-Werke in Hannover, at Klockner—Humboldt—Deutz in the Heidelberg Schnellpresse, at AEG in Mulheim/Saarn , at John Deere and Daimler-Benz in Mannheim, at the Fulda rubberworks (where the Hessian rubberworkers' strike was inaugurated on November 11, 1967), as well as in dozens of small plants. And in January 1968, despite the legendary paternalism in Krupp, the workers stopped work at the Essen automobile works of the Krupp concern -- which has been converted into a trust.
At the same time an unbroken chain of protest demonstrations -- not only against the war in Vietnam or the Springer combine* but also against the transportation fare increases -- brought together tens of thousands of university and high school students and, finally, even young workers or apprentices.
The students today unquestionably
* The reactionary press combine controlling more than 40 percent of German newspapers, which has been waging a hysterical proprganda campaign against the German student movement. -- W.O. constitute the vanguard of the political protest movement. But there is a danger that they will so far outdistance the development in the working class -- which they have as yet made little attempt to influence -- that they will suffer a tragic failure. In The Unfinished Revolution (pp. 20 ff. in the German edition), Isaac Deutscher points out that the 1825 Decembrist uprising against the Czar failed because the aristocratic elite did not have the majority of the nobility on its side. The Narodniks were likewise isolated from the peasantry by the 1861 emancipation law which brought reforms. On this, Deutscher wrote, "An oppressed class with great revolutionary potential betrayed its own revolutionary elite." Even the martyrdom of the Narodnaya Volya {a revolutionary-democratic terrorist organization made up of intellectuals] only demonstrated the powerlessness of a vanguard acting without the support of a decisive class. Lenin was the first to achieve a revolutionary breakthrough. He combined Marxist theory with the specific-— ally Russian tradition. And he maintained that the workers were the leading revolutionary force but that the peasants must be sought as allies; and he accorded an important educational and organizational role to the intellectuals and to the revolutionary elite of the mass workers' movement.
The German working class could certainly learn from the youth and student movement on how to mount an extraparliamentary struggle. However, if the two movements cannot be united, if the vanguard does not assume an educational and organizational:.role and does not take up . themes which are as vital to the working class as university and educational reform are to the students, workers can be used by reaction against the students -as has already partially occurred in Berlin.
Right now is the time to act when the depression has shaken the faith of a broad layer of the working class in the welfare society. All the theories that the working class is already integrated into the capitalist system and thus no longer capable of struggle must be tested. in the decisive test of action -- and the organization of these actions must not be left to the union leaderships. This is the task of the hour.
February 1968