2018 Kick-Off Event for the “Productive Transformation” Project

The members of the working group are Roland Kulke (facilitator of this working group for transform! Europe since April 2018, based in Brussels), Jean-Claude Simon (climate expert, based in Copenhagen) and Nadia Garbellini and Matteo Gaddi (members of Punto Rosso, economic researchers, based in Milan).

The workshop took place at the facilities of the CGIL Lombardia in Milan.

Summary

Introduction Xabier Benito Ziluaga, MEP, Podemos, GUE / NGL, member of the ITRE committee)

There is a strategic weakness in the discourses of the left in Europe. The left is lost when discussing industrial policies at European level. We have two growth models in Europe: the one that is oriented in France, in which the state plays an important role, and the other is the German model, which is more market-based. The German model is becoming increasingly dominant. We can see the results now, 10 years since the outbreak of the crisis. The EU is in the middle of a true reconfiguration of its base. Today’s EU is not the same as a decade ago. In the past, projects such as Airbus demonstrated the ability of the member states of the European Union to collaborate. Airbus is just one of these examples. Experts say that nowadays we wouldn’t be able to replicate this success story, due to new stricter and anti-state rules and also due to the lack of vision of our elites. The Juncker Plan, the EU Global Fund and other new institutions could have some advantages but they are far from being sufficient solutions for the challenges we have to face, both in socio-economic and environmental terms.

European production chains and the subsequent division of labor (Riccardo Bellofiore, University of Bergamo)

The global financial crisis has led to the current crisis within the EU. Therefore, financial capitalism, privatized Keynesianism or -as Professor Bellofiore calls it- "real subsumption of work in financing" are at the root of the problem of the real economy. This model is basically the Anglo-Saxon one. The European model is new and it’s the generalization of the German model: the mercantilist model, based on exportation that impoverishes the European neighborhood, now on a world scale. Undeniably, the introduction of the euro was a mistake. It’s output would be an equally larger error. What we have to understand is that the geography of finance has changed in Europe since the 1990s. Value chains follow the money and Germany has money. Therefore, the reconstruction of the European economy follows the interests of the German capital. A new autonomous center of the European economy has emerged around the manufacturing chains value of Germany, Central Europe and Northern Italy. This new network has severely cut it’s connection to the periphery of southern Europe. Due to the power of financial capitalism and technological progress, it is not about manufacturing itself, but a combination of manufacturing chains value with strong links to the provision of services in this industry. Industry 4.0 leads to a high personalization of the goods produced and, therefore, more and more profits are generated in the area of ​​customer relations after the sale. So, the important question for an economy with chains of global value  dominated by financial capital is: Who is financing what?

Technology, industry 4.0, labour and new forms of organization (Matteo Gaddi, Punto Rosso)

In terms of its growth models, we basically have two different possibilities: to be the center of transnational value chains (such as Germany, the Netherlands, etc.) or simply to be the home of its subsidiaries and suppliers. This last model seems to be the only growth model available, or rather, imaginable for the elites of the ECO countries. Especially in the automotive sector, we are seeing highly dispersed networks in Europe from a geographical point of view. Industry 4.0 is the latest development in the capitalist objective to obtain total control of its production chains. Industry 4.0 makes it very simple to control the smallest geographically dispersed producers. Its horizontal integration is much easier now with centralized software systems. Once the software scripts are installed on the machines on the periphery, the headquarters can initiate them remotely. Unknown to the workers in front of the machine, they can change the work processes around the world. As each product is marked with a bar code, each product of production and, therefore, each worker, can be tracked in real time to control their productivity. The monitoring system becomes "1984ish" as companies obtain more and more data, free of charge, during each production cycle, and there are no legal restrictions on this! Workers are not aware of the changes in the scripts of the machines that they have to manipulate: this is a great source of alienation and what Gaddi / Garbellini call "technological stress." Trade unions must train workers’ representatives in software skills. understand the scripts and must fight to influence their design.

Industrial policy at European level and public ownership of the means of production (Nadia Garbellini, Punto Rosso)

The legal framework of the EU with respect to the economic policy is hampering a healthy economic policy for the EU. Therefore, it must be changed without a doubt. However, in the short term, progressive forces must use any loophole offered by the EU. In the "services of general economic interest" sector, universal access for the public is more important than competition. Each state can define autonomously how to organize these sectors, be it, for example, in the health, transport or energy sector. States can even go a step further and produce products for themselves, which is perfectly fine, provided that these goods are manufactured by companies that are 100% state, this is the so-called internal production model. The European Court of Justice has repeatedly reinforced the rights of States in this regard. Now the question is: Where do they get money? The constantly increasing neoliberal rules prohibit countercyclical fiscal policies. There is also another gap found in national development banks, such as KfW in Germany or Cassa Depositi e Prestiti in Italy. These banks have a great financial power, since they are backed by the states, but they are not considered part of the public budget. If political power prevails, these banks can be involved in domestic production and also in general support for the economy. Although the Lisbon Treaty must be fundamentally modified, in the short term, there are some extremely interesting possibilities that progressive forces must use in the fight against unemployment and deindustrialization.

Commons (Roberto Morea, transform! europe’s Working Group on Commons)

Capitalism touches all aspects of our lives and, therefore, has become a direct opponent of human rights. States have a diminishing capacity to plan for the common good of their societies. We live in a model of competition that dominates the relations between states, regions, companies and, therefore, between people and people. The struggle for survival is so strong, so deeply rooted in our daily lives, that this system must be described in Gramscian terms as culturally hegemonic and not only technologically dominant. Everything we touch as humans is under the constant control of the benefits: education, health, transportation and our work. The cancer of profit thinking has even reached our sociopolitical systems, so we no longer live in times of democracy, but in those of post-democracy. The Italian struggle for the "right to water" not only went logically to the question of access to water, but was "deeper" to the organization of water production and distribution processes. The social processes that surround the whole process of generating water, but also the production of livelihoods, must be democratized so that we, as people, can discuss the issues of what we want to produce and how we want to do it. The last century was greatly influenced by the struggle of capital against labour: today the struggle is even more existential, since it is capital versus life. In this struggle, it is not enough to fight for state ownership of the strategic sectors of the economy, since states can also be as ruthless as private companies. We need a new form of the economy and a true democratization of our democracy. At the end of the day, we have to ask ourselves about a democratic process: What do we really need to produce? What are our real needs?

The Global South (Roland Kulke, gtransform! europe’s Working Group on Commons)

If we talk about a progressive reconstruction of the European real economy, we have to include, a priori, the economies of the EU neighborhood, both in the south-east of Europe and in the whole Mediterranean Sea. These economies are deeply integrated into the transnational chain value , which are being controlled by the capital factions of central Europe, and are, therefore, part of the European economic model of mercantilist exploitation of the world economy. The economies, like Tunisia, have reached a state of integration with the EU economies that give them all the responsibilities of an EU economy but none of their rights. Basically, this inclusion resembles the imperialist relations of the old school. This, of course, is very relevant to our current discussion on migration. Another important aspect for all those interested in the productive reconstruction of our economies lies in the free trade agreements, such as TTIP, TiSA, CETA or what is currently being discussed under the title "Electronic Commerce" in the WTO. Here, we have to support each other and work with organizations such as S2B to stop these agreements, since they would massively and permanently reduce the policy space of our societies in favor of any progressive socio-economic project.

Energy/ Just Transition (Jean-Claude Simon, Member of transform! europe’s Working Group on productive transformation and Sam Mason, PCS & One Million Climate Jobs Campaign)

Are we talking about the productive transformation of our societies? First of all, we must make it clear that time is running out: No transformation project that aims for growth is possible. Three of nine planetary boundaries have already been crossed. We need a clear transformation of our production system, all the metabolism of our society. We need to deglobalize, reterritorialize and radically relocate production. It is necessary to support a strictly rural local agriculture to reduce the harmful impact on nature. We need to invest heavily in the renovation of our buildings and we need to stop trucking. Only the train system is viable. The "One Million Jobs Campaign" is a successful attempt to raise public awareness of concrete changes in the economic structure. The issues that we are promoting are jobs in the public sector, education, health, transportation and renewable energy. We need public ownership of the energy sector.