Letter From Europe: Mitterrand clamps down (1982)

The Letter From Europe Column from the August 1982 issue of the Socialist Standard

It had to happen sooner or later. The attempt by Mitterrand's PS/PC government to revive the economy and reduce unemployment in France by giving people more money to spend—increasing “popular consumption" as it was called—just couldn't last. Since capitalism is a system which cannot be controlled or manipulated by governments and since most of the money to finance the social reforms in question came straight off the printing press, what happened was inevitable: the general price level in France rose, and at a rate faster than in other countries, leading to a fall-off in exports and a record balance of payments deficit which in turn made a devaluation of the franc inevitable. The effect on employment, on the other hand, was minimal: sales of consumer goods picked up for a while but the number of unemployed continued to grow, by nearly 16 per cent since Mitterrand came to power, passing the 2 million mark in October.

Exactly a year ago the Socialist Standard, analysing the economic policy of the then brand new PS/PC government, wrote:

It will fail completely and within a year or so they will be faced with growing working class discontent over persisting unemployment and rising prices which they will not be able to satisfy, since the continuing crisis will force them to recognise that under capitalism priority must be given to profits and profit-making rather than to social reforms and popular consumption. The crunch will then come and they will be forced, like all governments of capitalism sooner or later, to take openly anti-working class measures. 

As a matter of fact the crunch has come sooner rather than later, less than a year after the PS/PC government took office at the end of June 1981. On 12 June this year the French franc was devalued within the European Monetary System, for the second time in less than 9 months in fact, since Mitterrand had already been forced to devalue last October too. The October devaluation had been accompanied by rather timid price controls and mere appeals for some wage moderation. This time it was different. The government has adopted the following measures:

• a legally-imposed wage freeze lasting till the end of October, the only exception being the rise in the minimum wage due on 1 July; a legally-imposed price freeze also until the end of October but with some important exceptions such as oil, gas, electricity and imported goods;
• an increase in contributions to the health service accompanied by a cut in some benefits;
• a similar operation of increased contributions for less benefits regarding the unemployment insurance scheme.

The Minister of Finance, Jacques Delors, has already announced that austerity will not finish at the end of October but will continue. in the form of a restrictive “incomes policy", at least until the end of 1983; in other words, for at least 18 months in all.

Delors has also made no attempt to disguise the fact that the living standards of workers will have fallen by the end of October. He has publicly admitted that, while wages will be completely frozen, prices will rise by at least 2.8 per cent during this period. This will happen not only because prices are much harder to control than wages, but also because a number of exceptions to the so-called "prices freeze” are being allowed, particularly oil products (petrol, heating oil. paraffin) and imported goods. Since one effect of the devaluation will precisely be to increase the prices of imported goods, it is evident how large a loophole this latter will be.

So the government has now done a complete U-turn. The aim is now not to increase popular consumption but to reduce it! The Prime Minister, Pierre Mauroy, had already forewarned, even before the devaluation. that wages were soon going to come under direct attack from the government when he told a PS meeting on 21 May: 

Excessive nominal increases in incomes and wages maintain inflation and deprive our economy of the means to create jobs. The government has decided to act and we will shortly have occasion to talk about this again (Republicain Lorrain, 22 May).

It is clear from this that the government accepts the old. mistaken theory that it is wage increases that cause inflation. In fact, wages only increase in a period of inflation because inflation—an overissue of an inconvertible currency—inevitably leads to a rise in the general price level; wages, the price of labour power, merely rise in line with all other prices. Wage and salary earners are the victims not the cause of inflation.

The government's hope is that its austerity package will bring price rises—currently running at an annual rate of 14 per cent— down to an average of 10 per cent over the 12 months of 1982. This means of course that for the remaining months of the year the rate will have to fall well below 10 per cent. But unless they limit the amount of inconvertible paper money in circulation to what the level of economic activity requires—and there is no evidence whatsoever that this is their intention—then the pressure for prices to go on rising will continue.

If the currency is being overissued, then freezing wages and prices can’t stop prices rising. Certainly this can work for a limited period, just as a dam can stop a river flowing . . . for a limited period. Thus it is possible that the government could achieve a short term success but in the long run they will fail. Eventually, and sooner rather than later, the dam will burst and prices—including wages—will resume their upward trend. Delors is in fact very worried about what is going to happen after the legal wage and price freeze is over and this is why he is hoping to persuade the unions to moderate their wage demands over a longer period.

The union leaders, or some of them, may be prepared to go along with this. French union leaders are also politically involved and may well be prepared to betray their members’ interests to help a government they support just as British union leaders have done when Labour has been in power.

Indeed, just like Labour governments in Britain, the PS/PC government in France hopes to exploit its links with the unions to keep wages down and is publicly boasting that it will be better able to get the unions to co-operate in this than the opposition parties. And it is true that when the previous "right wing’’ government decided in September 1976 to block prices for 3 months it didn't dare block wages as well, as the present "left wing" government has done, limiting itself simply to asking employers not to offer excessive wage increases. But even this brought trade unionists out on to the streets proclaiming "No to Austerity". History shows that allegedly "socialist” governments in all countries are better able to impose austerity on workers than openly capitalist ones. (A case could even be made out for saying that this is their role within capitalism.) What is happening in France today is a further confirmation of this rule.

Two further points must however be made. First, in a period of high unemployment real wages (what wages can buy) will tend to be under pressure anyway for purely economic reasons, irrespective of government policy or of whether the union leaders betray their members or not. Second, if inflation of the currency continues, then nominal money wages will go on rising, once again irrespective of what governments and union leaders may or may not do. But government action to try, in the one case, to reinforce downward pressures on real wages and, in the other, to try to counter the upward pressures on nominal wages clearly reveals that all governments are forced to run capitalism in the only way it can be — against the interests of the wage and salary earning majority. A sustained policy of increasing “popular consumption” under capitalism must sooner or later restrict popular consumption to protect profits.

Actually, as we pointed out in the article last August, Delors did not have such a simplistic solution to the economic crisis as the PCF, the CGT trade union and some of his PC colleagues — that economic activity could he revived by giving people more money to spend. He realised that the French economy was part of the world economy and that a revival in France could not be sustained without a revival in the world capitalist economy. But he too was naive in believing, without any reasonable grounds for doing so, that this world revival would occur within a year and that therefore the French government could safely "reflate” its economy (print more money to finance government spending) in anticipation. In June last year he declared that "the reflation measures already taken by the government . . . are a limited anticipation of the recovery of the world economy which the experts foresee for the end of this year or the beginning of next (The Times, 24 June 1981).

The end of 1981 came, but there was no world recovery. The months of 1982 passed, still no world recovery. The "experts” began to creep back into their holes. Meanwhile, as a direct result of the government's spending financed by the printing press, the rate of inflation remained higher in France than in other countries. . . leading eventually to the devaluation of 12 June and the current austerity measures.

When Prime Minister Pierre Mauroy announced the devaluation he could only remark pathetically that his government had done what it could "but the international recovery was not at the rendez-vous”. It takes two to make a rendez-vous and the PS/ PC government has found out the hard way that governments are in no position to impose a rendez vous on the capitalist economy. Capitalism is a world system which operates according to its own economic laws, going through its regular boom-slump. boom-slump cycles, irrespective of what governments may or may not do. It is true however that, while governments can do nothing to bring about a recovery before it would normally occur, they can. as Marx pointed out. make things worse by mistaken monetary policies, as the present French government just seems to have done. Mauroy would have been better to have employed some other metaphor: "we took a risk and we lost" or "we took a leap in the dark and fell flat on our faces". Or even Harold Wilson's "we were blown off course”!

This utter failure of the PS/PC government in France is yet another confirmation of our contention that capitalism can never be made to work in the interests of the wage and salary earning majority. It is a profit-making system based on the exploitation of wage-labour and can only function as such, whatever the political colour the government may happen to have. Any party which takes on the responsibility for governing under capitalism is sooner or later forced, whether it originally intended to or not, to respect the economic logic of capitalism which decrees that profits must come before wages, that the consumption of the wage and salary earning class must be limited so as to allow profits to be made.

Mitterrand's failure is proof that reformism is a futile waste of time. Since the Labour Party’s economic policy resembles very closely that pursued by Mitterrand until 12 June, there's a lesson here for workers in Britain too.

Adam Buick (Luxemburg)

Sting in the Tail: The Ancient Bill (1989)

The Sting in the Tail column from the September 1989 issue of the Socialist Standard

The Ancient Bill

In a recent Parliamentary debate Douglas Hurd, the Home Secretary, revealed that only three out of ten crimes reported in London are likely to be followed up by the police.

This gave Roy Hattersley, Labour's home affairs spokesman an opportunity to berate the present "crime screening" system, whereby priority is given to those crimes most likely to be solved.

Nothing special about this you may think, It is the old parliamentary game of the opposition criticising the government and pretending they could do a better job. But Hattersley went further than this. He was concerned that this would lead to "a decline in trust between public and police."

This view is based on the fallacy that in the past the public had trust in the police. Those workers who took part In the miners' strike would doubtless have something to say to Mr. Hattersley about that!

But distrust in the police force is no modern phenomenon. The first police force in Ancient Athens had to deal with the same problem:

But this gendarmie consisted of SLAVES. The free Athenian considered police duty so degrading that he would rather be arrested by an armed slave than himself have any hand in such despicable work.

Origin of the Family, Private Property and the State by Frederick Engels.

Left-Right Farce

Are you easily confused ? Do you find politics a bit of a mystery ?

If so then don't worry because you're not alone. Jacques Delors, President of the European Commission and obviously a mighty thinker, doesn't know if he is "on the extreme right of the Left or the extreme left of the Right" (The Guardian 16 June).

And according to the media the left wing Labour Party has a right wing (Hattersley, Gould, etc.) while the right wing Tories have a left wing (Heath, Gllmour, etc.).

What all this shows is that different labels cannot hide the basic sameness of outlook of both the "Left" and the "Right".

Source of Value

The price of gold In 1980 reached 850 dollars an ounce but is now around 370 dollars.

Reasons for this collapse include investors' money being lured away from gold by the strong dollar, high interest rates and the recovery of stock markets.

Of course these factors could change tomorrow and gold's price would rise again but there are more fundamental reasons for its decline.

One is the worldwide discovery of new goldfields which have sharply increased its supply. Another is that gold is simply not so valuable nowadays because the amount of labour necessary to produce it has been cut by more efficient mining methods, and labour is what gives every commodity, including gold, its value.

Inflation and Enoch Powell

The government spokesmen are at It again. They are running around the country talking about "inflationary wage demands". The recent increase of 8.8 per cent awarded to rail workers has been greeted with cries of "inflationary wages".

This is of course nonsense. It is not trade union action that causes inflation of the currency. It is governments that cause inflation.

One of the few politicians who recognise this and is not afraid to state it is, surprisingly, Enoch Powell. In the magazine Intercity of July/August he puts the position clearly:

The guilt is not with the public who persist In spending a depreciating currency. The guilt is not — even the suggestion has an old-fashioned sound nowadays — with the trade unions and the workers who obtain "inflationary'’ wage rises or with the employers who pay them.

Guilt there has to be, however, as guilt there will always be when money Is debauched: and the guilt, as usual, Is political, the guilt of politicians who use the power to manipulate the money in pursuit of objectives which, if they were candidly avowed and debated, would be publicly rejected.

Short Memories

Some people have short memories. During a debate in Parliament on the NUR's industrial action, Norman Fowler, the Employment Secretary, told Labour MPs:

The fact is that, however damaging or irresponsible any Industrial action is, you will always support it.

The Guardian 19 July

If Fowler had been dealing with Labour's attitude to strikes when in opposition then his outburst could be excused, but he must know Labour's record when in government.

For example, did Labour governments support strikes by the Dockers in 1949 and 1950, the Seamen in 1966, the Firemen in 1977 or public service employees during the Winter of Discontent ?

These and many other strikes were condemned and the strikers vilified, and this probably explains why no Labour MP told pipsqueak Fowler that no matter the issues in any strike, his party will always support the employers.

In view of these anti-trade union actions by both Labour and the Tories isn't it crazy that the vast majority of trade unionists will vote for them at the next election ? Some people certainly have short memories.

Money Makers

Victor Keegan usually writes clearly about economics in The Guardian so it was disappointing to read his piece of 17 July on the attempted takeover of BAT Industries by James Goldsmith and his cronies.

Keegan writes that the £3.7 billion which the bid added to BAT shares in just three hours ". . . must surely be the fastest bit of wealth creation ever recorded".

A slip of the pen? Not a bit of it, because he goes on - "The Increase in wealth is real in that if the bid succeeds then the shareholders in BAT will be that much richer . . .".

So they will, but the buyers of the shares will be that much poorer so what has that to do with wealth creation?

For Victor Keegan's information, the financial activities of Goldsmith and his ilk merely MAKE MONEY and they are perfectly happy to leave wealth creation - the production of the goods and services society needs - to the useful majority.

A Brave New World

All of us from time to time have tried to envisage what the future will be like.

However it is doubtful if in our worst nightmares we could have envisaged a future such as planned by the Adam Smith Institute. This bunch of hard right Tory headbangers have been turning their collective genius to the problems of crime.

In a report in The Independent dealing with a book "Streets Ahead” published by the Adam Smith Institute we learn:

The quality of city life would be improved by residents "privatising" their streets, mounting security patrols and putting gates at the end of the roads to keep out traffic, according to the Adam Smith Institute.

The only advantage that we can see in the scheme is that we would be able to repel, at our own privatised Checkpoint Charlie, such socially undesirable types as rent collectors, bailiffs and Tory Party canvassers!

Letter From Europe: Wage-freeze in France (1983)

The Letter From Europe column from the January 1983 issue of the Socialist Standard

The (total) wage and (partial) price freeze imposed by the French government following the devaluation of the franc last June came to an end on 1 November. Since the government had expected prices to rise by at least 2.7 per cent during the freeze in other words, it believed the real purchasing power of wages would fall by this amount the 1.5 per cent increase is being heralded as a success.

In fact however this slow-down in the rise in the general price level was due more to the current world depression than to the French government’s price controls, as is shown by the fact that over the same period prices rose by less in Britain and Germany.

As far as the general price level is concerned, two contradictory factors are now at work in all countries: first, there is the continuing inflation of inconvertible paper currencies which exerts an upward pressure, and then there is the world depression which exerts a downward pressure. In the 19th century, when the value of money was relatively stable, the general price level still tended to rise in times of boom (through demand for goods tending to exceed supply) and to fall in times of slump (through supply tending to exceed demand).

This latter downward movement has not ceased to operate, but it has tended to be obscured by the inflationary monetary policies pursued by nearly all governments since the beginning of the second world war. Due to the overissue of paper currencies. the general price level has continued to rise even in slumps, a phenomenon which has been dubbed “stagflation” or “slumpflation”. Nowadays the depressing effect of a slump on the price level is only discernible in the slowing down of the rate of price rises. Such a slowing-down has become particularly noticeable over the last six months or so. enabling both Thatcher in Britain and Mitterrand in France to claim the credit for something for which they are not in the least responsible.

The other result of a slump is falling real wages — what wages will buy in relation to the prices of consumer goods. In the present era of chronic inflation, this does not necessarily involve a fall in money wages (though this can happen, and has been happening). Real wages fall also if money wages increase less than the increase in consumer prices. This has been happening for some time in Britain, where trade unions have had to settle for wage increases below the rate of inflation. The recent government-imposed wage freeze in France has had the same result.

During the four-month period of the wage freeze, not only did prices rise by 1.5 per cent, representing an equivalent cut in the real purchasing power of wage and salary earners, but any rises under previously negotiated agreements due during this period were banned by law from being paid.

Naturally the employers were the last to complain about this since both the decrease in real purchasing power (from their point of view, a decrease in real wages costs) and the non-payment of contracted wage increases meant an increase in their profits. In other words, the money lost by the workers went into the pockets of the employers.

The government claimed at the time it introduced the wage and (partial) price freeze that this was part of a necessary national effort in face of the crisis, but the Minister of the Economy, Jacques Delors. has recently disclosed that the real aim was to increase profits. In a speech to the congress of a catholic employers’ organisation called “Ethic" on 26 October, apart from announcing that the minimum wage would not be increased as much in 1982 as originally promised (which attracted most of the publicity), he also spoke about the investment problems of private capitalist firms:

Gross operating revenues have fallen for the last three years to such levels that enterprises no longer have the minimum margin of self-financing to allow them to ensure a balanced financing of their investments (Républican Lorrain, 28 October).

"Gross operating revenues" (revenus bruts d'exploitation) is a term used by accountants to refer to the income of enterprises over a given period, normally a year, over and above their production costs but before payment of taxes, social insurance contributions. interest charges and dividends. In other words, gross profits.

After complaining, then, that these gross profits were not high enough. Delors went on:

A recovery of the gross operating revenues of enterprises is needed to restore a dynamism to our economy, and without a minimum of transfers of the national wealth to these gross revenues the minimum conditions for investment will not be met (our emphasis).

“National wealth" is a vague term, but what Delors has in mind is the "gross national product” (GNP), or the total amount of new wealth produced in a year before deduction of that used to renew used-up fixed capital. But the wealth newly-produced in a year only has two elements: the gross operating revenues of enterprises and the wages of productive workers. Clearly then, the wealth Delors wants to transfer to gross profits can only come out of that currently going to workers as wages. Which is precisely what the four-month wages freeze achieved. Indeed, the real reason for the freeze is quite clear: to decrease wages so as to allow enterprises to make bigger profits.

Although the wages freeze ended on 1 November, government-backed wage restraint is to continue until at least the end of 1983. The government has set the target for price rises in 1983 at “only” 8 per cent and has proclaimed this as the limit too for wages increases this year, though it is allowing provision to be made for additional increases negotiated in January 1984 if in the end prices rise by more than this limit. As has frequently happened in Britain under similar circumstances, it is civil servants and workers in the nationalised industries who have been the first victims of this policy of wage restraint, a case of the government as employer setting an example to private employers. One of the “benefits” of nationalisation (or state capitalism) that its advocates forgot to mention to workers in newly-nationalised industries?

We have even been treated to the spectacle of one group of employers, those in the sugar-beet industry, being told by a government composed of "socialists" and “communists" that an agreement under which wages were automatically linked to rises in the cost of living and which they had been applying for some years was illegal and should not be applied either for 1982 or for 1983. The PS/PC government unearthed a statutory order dating from 1959 declaring such indexing illegal, even though such agreements, which provide workers with a minimum protection from the effects of inflation, have in fact been widely applied in France in recent years. The government's invoking of this order now is yet another proof of their intention to reduce the real purchasing power of wages and salaries.

This blatantly anti-working class policy pursued by an allegedly socialist/communist government merely confirms that it is not possible to run capitalism in the interest of the working class and that any party which tries to do so is bound to end up running capitalism in the only way it can—as a profit-making system in the interest of those who live off profits derived from their monopoly over the means of production.

Adam Buick

(Luxemburg)

Letter From Europe: Communists in Government (1981)

The Letter From Europe Column from the August 1981 issue of the Socialist Standard

After the zig . . . the zag. After denouncing for the past three years or so years Francois Mitterrand and his PS as reformists, who simply wanted to "manage the crisis" and run capitalism, the French Communist Party (PC) now has four Ministers in the government formed by Prime Minister Pierre Mauroy, following the sweeping PS victory in the June General Elections.

The PC will now itself be participating in the government of capitalism. Not for the first time though, since it also had Ministers from 1944 to 1947. At the time PC leaders toured the country urging workers to work harder and denouncing strikes as a "weapon of the trusts". It was probably partly in the hope that they will again do this that Mitterrand decided to admit them to his government (he didn't have to, since his party has an absolute majority in the National Assembly.)

In this respect there was a significant phrase in the agreement signed in the night of 22/3 June between the PS and the PC and which paved the way for the appointment of the PC Ministers. After stating that the two parties pledged themselves to apply Mitterrand's election programme with "flawless solidarity" at government level, it went on to state they would do the same at regional and local level and "in the enterprises". In other words, the PC cells in the factories are also committed to applying and defending the policies of the PS-PC government. Since its cells in the factories are the means by which the PC controls the main trade union federation, the CGT, in effect this organisation too will tend to become, in Lenin's contemptuous phrase describing his idea of the role of trade unions under the Bolsheviks, a "transmission belt" for the PS-PC government. Of course this won't be easy to implement and in the long run the workers will spontaneously kick against it, but once again it shows how being linked to a political party weakens the effectiveness of trade unions in the defence of their members' wages and conditions.

This pledge is also contrary to what the PC was saying right up to the first round of the presidential elections on 26 April, that "change" could only be imposed by the struggle of the workers and not left to a PS President. We could quote many passages to this effect from Charles Fiterman, the No. 2 in the PC hierarchy and now Minister of Transport. For instance, in Avancees No 5, March 1981), after warning against giving a blank cheque to Mitterrand and as a miracle man ("homme providentiel"), he wrote that the PC "calls on the workers not to delegate their responsibilities, but to struggle to impose change". It was certainly because the PC had employed such language that the PS used its immensely superior bargaining position after the General Election to impose the insertion of this reference to solidarity "in the enterprises" on the PC. Has the PC sincerely accepted this? We doubt it (people who change their line so often and so rapidly just can't be sincere), but then that's not our problem.

Reformist Euphoria
At the moment it is all euphoria in trade union circles and a number of measure have improved, for the time being at least, the situation of many workers. The minimum wage, family allowances, pensions, rent allowances have all been increased. The big question, however, is: will it last? Will this increase in workers' purchasing power be sustained or will it be eaten up by rising prices or taken away by austerity?

Unlike the Labour Party in Britain or the SPD in Germany, the PS in France has never really had any experience of governing capitalism, at least not on its own. This is why reformist illusions about the ability of the government to make the economy work in the interests of ordinary people are so strongly entrenched in the PS, at all levels including Ministers.

Take their economic thinking. It is simple and apparently logical: the way out of the crisis is to give workers more money to spend; their purchases will then stimulate production so starting off the process of recovery. This underconsumptionist view of the cause and way out of the crisis is shared by the PC, but is quite mistaken and a policy based upon it can only lead to one result: increased inflation while the crisis, which is a world crisis, continues.

The Minister of Finance, Jacques Delors (who had some experience of governing capitalism when he was adviser to a Gaullist Prime Minster between 1969 and 1972) understands a little more how capitalism works than most of his colleagues (relatively speaking that is, since although not a crude underconsumptionist he is still a Keynsian). He defends the new government's policy of increasing popular consumption, not as a way out of the crisis but as an anticipation of the recovery he sees coming in the world economy: "we are wanting to anticipate, but in a reasonable way, the recovery of the economy at world level" (Le Nouvel Observateur, 1 June).

The reflation measures already taken by the Government . . .  are a limited anticipation of the recovery of the world economy which the experts foresee for the end of this year or the beginning og the next. (The Times 24 June).

In other words, he at least recognises that the crisis in France is not caused by internal underconsumption (and so cannot be solved by increasing purchasing power) but that it is part of the general world capitalist crisis. This was in fact what ex-President Giscard and his Prime Minister Barre tried to explain during the presidential election campaign, but they weren't able to convince people. PS (and PC) propaganda to the effect that Barre deliberately chose to keep the crisis and unemployment going because they were heartless men was more successful. Now—poetic justice perhaps—they in turn have been given a chance to run capitalism in a crisis. They will discover that the policy a government pursues is not a question of the feelings or motives of its members—of being concerned—but of what the economic situation permits, and dictates.

Riding for a Fall
If Delors is proved wrong in his prediction/hope that the recovery in the world economy will begin within a year, where will the government be then?  Unemployment will not have been reduced (except by converting some of the into civil servants) but inflation will have increased. The government has proclaimed that its social reform measures will not be financed by the printing press, but partly by taxing the rich and partly from the extra tax and social security contributions that would result from the increased employment it hopes its policies will bring.

If unemployment remains at a high level, as it inevitably will of the world economy doesn't recover, they will be faced with a gaping budgetary deficit. They will then have a choice: cut back on the social reform measures or have recourse to the printing press. If other reformist governments who want to appear friendly to the trade unions are anything to go by, they will choose the latter. The resulting inflation will not only cut the value of the social benefits but also put up French export prices and make French goods less competitive on the world market, so aggravating the crisis and undermining the Franc.

This is the most likely result of the new PS-PC government's current policy. It will fail completely and within a year or so they will be faced with growing working class discontent over persisting unemployment and rising prices which they will not be able to satisfy, since the continuing crisis will force them to recognise that under capitalism priority must be given to profits and profit-making rather than to social reforms and popular consumption.

The crunch will then come and they will be forced, like all governments of capitalism sooner or later, to take openly anti-working class measures. The question will then be to see how the PC acts—will it swallow the austerity measures in the name of "flawless solidarity" or will Fitterman and his colleagues resign? This will be a problem not only for the PC Ministers but also for those from CRES wing of the PS, including its leader Jean-Pierre Chevenement, the Minister for Research, whose economic analysis is very close to that of the PC and who declared in a policy statement submitted to the 1977 PS Congress:

The Left must not allow itself to be caught in the cog-wheels of a supposed good management of capitalism, precisely when this problem has become insoluble. It must at the same time avoid letting itself become dragged into the spiral of inflation and external deficit which leads to subservience to international money-lenders and inevitably to the application of a policy of austerity, in short to a return in strength of the Right (Ceres par luimeme, p. 159. Our translation).

Since in fact there is no chance of the CERES/PC policy of a native French state capitalism behind tariff walls being adopted (which of course is no solution either), this is precisely what will happen. Will Chevenement and the others then resign or will they, like Tony Benn under Wilson and Callaghan, find some excuse for staying on?

If, on the other hand, by a stroke of luck, Delors' gamble comes off and the world economy does not recover within the next year this would not disprove the socialist case against reformism, even if Delors himself went down in French history as an economic wizard! In fact, it would not have been the policy of the PS-PC government that caused the recovery, but capitalism at world level as it naturally moved on from the crisis and slump stage, a process over which neither the French nor any other government has any control and which would have come about quite independently of their actions.

Adam Buick (Luxemburg)