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RISE AND FALL OF THE WELFARE STATE by Ken Howell

posted 2 Jun 2014, 03:49 by Gerry Kangalee   [ updated 2 Jun 2014, 03:50 ]
Between the years 1914 and 1945 the world experienced two world wars and the international capitalist economy crashed in the late twenties into the thirties – the Great Depression. In 1917 an event of earth shattering proportion occurred in Eastern Europe: the working people, under the leadership of the Bolshevik Party, seized power and establish a workers state. 

This resonated with working people all over the capitalist world at a time when the trade unions were strong and very militant. This led to the consolidation of the unity of the movement under the leadership of the World Federation of Trade Unions which was formed on October 3, 1945. 
 
This new unity and strength that was evident, and in which the left movement played no small part, provided the platform on which workers were also demanding of their respective governments that social and economic changes must be made in order to improve the quality of their lives. Against that background of the social and economic disaster created by the war in Europe, and the great depression the governments in power at the time, in Europe and America, were forced to make a tactical retreat from their anti-worker position by making concessions on the home front in response to the workers demands.  

This was done to mislead opportunistic labour leaders, into believing that capital and labour could work together in the interest of all. They held that position to a lesser extent until the 1980s while working assiduously at dividing and weakening the workers’ movement.                                                                             
  
Organisations such as the International Labour Organisation and the League of nations, subsequently the United Nations made their appearance on the world stage. The intention behind the formation of the UN, broadly, was to establish rules of behaviour which countries were expected to observe in their relations with each other. And in the case of the ILO, its purpose was also to create a forum in which employers and workers’ representatives as well as governments would meet and formulate rules by which they were to be guided in their day to day relations in the work place and in their respective countries. 

As a result, a number of rights which workers had won and with which we are all familiar were consolidated. And so, it can be argued, that in the face of the ever present threat or example presented by the existence of a political and economic system with the potential to replace capitalism, economists in the west set about to take measures in defence of capitalism. Towards that end, a comprehensive political and economic defence was mounted. John Maynard Keynes, a renowned economist, came to the rescue. 

INTERVENTION

His recommendations led to the intervention of the State in the economic activities of the respective countries, as a result of which, social programmes such as unemployment relief for persons out of work were established; legislative restrictions were placed on financial institutions; certain enterprises were nationalized and national health and Pension programmes were introduced and so on. 

What began to take shape in these countries was what became known in some instances, as a mixed economy and where the presence of the state was pervasive in the provision of social services and benefits. The term welfare state gained prominence, sometimes in a derogatory manner, to describe the unacceptable involvement of the state. 
 
On the international front however, a new war had started. It became known as the Cold War. During that period the capitalist powers, led by the United States of America, embarked on a strategy to undermine Socialism in Eastern Europe under the slogan that the workers’ state posed a grave military threat to the West. And so the world trade union movement also came under attack because of the patriotism engendered by the false perception that the ideas of socialism posed a threat to workers in the capitalist world. 
 
With the connivance of reactionary leaders from some trade unions, the Central Intelligence Agency of the USA engineered the split in the World Federation of Trade Unions (WFTU) and a new federation was formed, which became known as the International Confederation of Free Trade Unions (ICFTU). This attack on the WFTU had its effect on the trade union movement in this country and led to a split in the Trinidad and Tobago Labour Congress, the labour federation in existence at that time. 
 
NO ILLUSIONS

It is necessary to be reminded of that history so that we can appreciate the fact that the capitalist forces have no illusions, when it comes to the question of class struggle and who are the enemies of their class. They identified the workers and their organisations as the enemy; even when they pretended that it was not so. They recognized that following the victory over fascism and the heroic role which the Soviet Union played in that struggle, the working class had a powerful ally standing in its defence. That was why steps were taken to appease organized labour in the West. In other words, they were using the carrot and the big stick almost simultaneously; in furtherance of the rule that when you cut off the head the body will die. 
 
It is therefore necessary to understand and appreciate the context in which the retreat of the capitalist state to a place where it was forced to concede to the demands of the working people by reconfiguring the economic and political structures to provide more rights and freedom for working people. It is necessary to see the welfare state from that premise. The intention was never to allow the measures implemented in the establishment of such a state to exist indefinitely. That is why the enemies of the working class worked tirelessly to overthrow socialism in the Soviet Union and in East Germany; not without the connivance of enemies within and without the workers’ state and the trade union movement. 
 

The opportunity presented itself in the 1980s. Because of its heavy dependence on oil and other irreconcilable differences, the Soviet Union collapsed, when the price of oil fell on the international market. Most oil producing countries were affected. One will recall that right wing governments were in office both in the USA and the United Kingdom (the UK).These governments led by President Ronald Reagan in America and Prime Minister Margaret Thatcher in the UK, launched a devastating political offensive against the workers movement, with the active support of the reactionary governments of their allies in Europe and the former colonies.

BIG GOVERNMENT

In the USA the attack took the form of a campaign against “Big Government”- that was the war cry of President Ronald Reagan. In the UK, the health system was privatized, while Trade Unions came under attack when certain pieces of legislation which dealt with the rules governing balloting of members on the question of strike action was either amended or repealed. The Mine Workers Union bore the brunt of that attack.                                                                                                                                    

Here in this country, the plans for the attack on workers benefits and the privatization of the people's assets were laid in reports prepared by two task forces set up by the Peoples National Movement (the PNM). These are the Euric Bobb Report and the Demas Task Force Report which is also known as the Imperatives of Adjustment. Dr. Euric Bobb was a Governor of the Central Bank of Trinidad and Tobago, and Mr. William Demas, was an Advisor to Dr. Eric Williams, the then Prime Minister, on matters pertaining to the economy. 

Certain aspects of the Bobb report were implemented by Mr. George Chambers who succeeded Dr. Williams following his death in 1981. These were: the recommendation that subsidies should be suspended. But when it came to the question of the implementation of the draconian measures recommended in the Imperatives of Adjustment Mr. Chambers declined.                                             
 
The task fell to the now deceased former Prime Minister and President His Excellency Mr. Arthur Napoleon Raymond Robinson, to implement those recommendations. He, being a member of the Task Force, no doubt felt honoured to be the one who history called upon to be the author of that sad story in the life of our country. It is now history that he negotiated his way into becoming the leader of an amalgamation of political parties, which became known as the National Alliance for Reconstruction (NAR), and that party defeated the Peoples National Movement in a landslide victory vote of 33-3 in 1986.  

The NAR, which had at its core right wing elements who belonged to a party which was known as the Organisation for National Reconstruction (the ONR), obviously found common ground with Prime Minister Robinson and supported him in his eagerness to take such a dangerous step. Economies were in crisis across the globe and here in this country. As a result of the oil crisis a number of companies went into receivership and thousands of workers lost their jobs. This created a glut on the labour market, thereby presenting the employers with the opportunity to take away workers hard won benefits; to introduce contract labour; to take away indexed cost of living allowance. 
 
Emile De La Grenade, the then head of the Employers’ Consultative Association proudly announced that there was no safe haven and they were taking the fight to the workers. And so, the battle lines were drawn. The world trade union movement was under attack.  

Here in Trinidad and Tobago it came to a head in 1989, when the two rival trade union federations the Labour Congress and the Council of Progressive Trade Unions were forced to come together in unity to fight against the NAR government, to prevent the implementation of the structural adjustment policies contained in the Demas report. As a result, on March 6th 1989 (day of resistance) a national strike was called and the country was shut down!  

Against the background of the history which I have attempted to recall, it must be understood, that the term “welfare state” is a political and economic description given to gains made by the forces of the working class in its struggles against the forces of capitalism for greater democratic space in that treacherous environment known as the capitalist system. 

While it may appear that we are at a difficult place at this time, given the apparent confusing nature of the political climate, there is still hope for us. We working people always find our way home. We might not win some battles. But remember, we are a resilient people and we will win the war.
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