Spanish Socialism, Neither Social Nor Democratic

Against the Current, No. 28, September/October 1990

James Petras

THE MOST LASTING IMPRESSION one receives after living in Spain is the striking contrast between the promise of the Spanish regime and its practice. The contradictions of Spanish socialism are numerous: a party that contested for power from a strong working-class base (it is called, after all, the Spanish Socialist Workers Party, PSOE) and which, upon assuming power, has pursued a business orientation with a single-mindedness that would impress the most earnest Thatcherite.

The PSOE promised comprehensive social changes and realized a capitalist transformation; ascended to power based on rising working-class militancy and presided over a policy aimed at weakening working-class organization. It is a party whose ideologues and publicists promoted an ideology promising to extend the power of civil society against the state, and who in power witnessed the extension of state control over civil society; a party that attracted a substantial number of “anti-bureaucratic intellectuals and transformed them into functionaries of the state.

What the late Franco and later the Suarez regimes could not or would not dare to do— reduce living standards, introduce permanent insecurity into the labor force, subsidize employers to hire non-union workers — the Socialist government pursued with doctrinaire zeal … in the name of the working class.

The Socialist Party of Spain today is totally alien to the traditions and practices of the left – alien even to the least reformist “welfarist” social democracy. It has ruptured all relations to its own past— the tradition of Largo Caballero [leader of the SP left during the Spanish Civil War—ed.] and militant worker reformism.

It is not a party of technocrats and industrialists either. It is a party of the propertyless professionals on the make – hooking on to “where the action is”: massive real-estate dealing from the Costa Brava to the Gold Coast (and in the major cities where land prices have quadrupled over the past three years) and laundering massive amounts of illicit funds. Spain under the Socialists has the dubious reputation among the narco-capitalists of being the easiest site to “clean” money; hence the massive inflow of investment, mostly “hot” money.

The Socialist Party is the “new right” today in Spain. Populist in style, plebian in appearance, conservative and elitist in policy, it practices the politics of great entertainment spectaculars and mass diversions to convert the critical public into “passive masses” (a term coined by Ortega y Gasset). Itis the regime of international conferences, of prominent intellectuals (including left wingers) at five-star hotels discussing world ecology problems, perestroika and socialism for the year 2000—while the water in Tarragona is so polluted it can’t even be used in auto radiators, Socialist trade unionists who dare to criticize the party are abused by the party apparatus, and the majority of workers under twenty-five have never had a job. But the visiting intellectuals forget to mention the discrepancies between the grandiose themes at the international conferences and the mundane problems of the Spanish working class, so as not to upset their generous host.

The Socialist apparatus could not believe that there could be any mass discontent with an economy going so well, until December 14, 1988, when 10 million workers, self-employed and small business people closed down the economy so tight that you couldn’t buy a coffee from any cafe, find a taxi on any street, or see smoke from any chimney. That day the building crane outside my window was still and the singing Andalusian construction workers couldn’t be heard.

Immersed in their tightly controlled world of the party apparatus, convinced by their own myths, deriding the minority in parliament, the Socialists believed they had the world in their hand. On the night before the general strike, with their utter contempt for the unions, the state bureaucrats insisted on continuing their news broadcasts; and at midnight, when the television announcer kept moving his mouth and no sound came out, it became evident that for once the workers were communicating back to their masters. The voiceless had spoken and the government news announcers, who had purported to say everything truly said nothing.

What Is The New Class?

The contradictions of Spanish socialism can best be understood by analyzing the class character and aspirations of its leaders and cadres. The PSOE’s exercise of power has had little to do with the working class, even less with eliminating or ameliorating class differences.

Specifically, the Spanish Socialist Party was the vehicle for bringing to power a “new class” of upwardly mobile professionals whose only rapid road to the top — to private wealth and social status — was through politics, in particular government office. The Socialist Party elite follows a typical three-stage pattern: early militancy involving popular mobilization; leading to electoral victories and public office; and followed by the use of public office to enter elite circles, make investments, and reap fantastic incomes.

Among the new rich Socialist and Socialist-connected bankers and business people multimillionaires are Mario Conde and his partner Juan Abello, who have made their fortune in banking and speculation in less than three years of Socialist government Alberto Cortina and Alberto Alcocer have gained a fortune through public contracts and concessions granted for municipal services. Probably the most notorious case is Miguel Boyer, formerly Prime Minster Felipe Gonzalez’s minister of economy and finance, who became one of the country’s highest paid bankers.

The list of newly rich Socialists is endless. The rampant growth of speculative capital provoked one Socialist ex-minister of transport, Enrique Baron, to describe the Spanish economy as a “casino,” in which there is unlimited frenzy for easy profits. It is telling that the leading economic figures under the Socialist regime have all risen through non-productive, speculative and financial dealings.(1)

Once in power, the Socialists dropped their early anti-oligarchic rhetoric against the Francoist elite, bankers, industrialists and generals, and rebaptized their new coalition partners as modernizers and democrats. Henceforth, to attack the “oligarchy” was to be against “modernity” or to be unEuropean. The essential point is that the class resentment voiced by Spanish socialism’s professionals expressed not opposition to class domination, but their desire to escape from the dominated class and become part of the dominating class.

The new class that dominates Spanish politics is held together in part by family ties, nepotism being one of the major characteristics of the regime’s leading spokespeople. Four well-known “Socialist families” (the Solano, Fernandez Ordonez, Yanez Barrionuevo and Rodriguez de la Borbolla families) occupy twenty-one high positions in the Gonzalez administration. Promotions and senior appointments involve spouses, brothers, brothers-in-law, cousins and other relatives.

In the economic sphere, the Socialist regime presided over the fusion of old and new members of the dominant class. Most evident is the large number of newly rich Socialist bankers, real-estate speculators and building contractors. What has clearly not appeared among this elite is an industrial class with avocation for creating a technologically advanced national industrial complex able to compete in the European Common Market.

For high-tech industries, the Socialists have provided generous concessions to outside capital, which has set up numerous assembly plants requiring low-level skills. Despite all the rhetoric about high technology and industrial reconversion, the Socialist government does not have a clue about formulating and executing a comprehensive industrial policy. Its policies of industrial reconversion have led to massive closings of industrial firms with no commensurate development of new industries. Its entry into the Common Market has not been accompanied by the growth of new competitive Spanish industries, but rather has led to the displacement of Spanish products by European ones.

In the agricultural sector and fisheries, Spanish producers have similarly been hard hit by European Economic Community (EEC) reductions, quotas and competition; Spain’s strong sectors have been restricted and its weak ones overwhelmed. The upwardly mobile professionals have brushed off these failures as part of the costs of becoming “modern” and “European” — meaning a 20% unemployment rate and a dependence on both cheap, non-unionized labor and tourist earnings resembling those of early “developing” countries.

The new class in Spain is deeply conformist in the substance and style of its politics. In its mass circulation weeklies and public pronouncements, its ideology is nothing more than the celebration of its own success: the celebration of the political and economic structures that provide the markets for the big real-estate deals and the summer homes and vacations on the beaches of Marbella and Menorca.

The crass consumerism that has become emblematic of the Socialist nouveau riche is evident in the massive growth of luxury imports: imported autos grew by 60% in the first quarter of 1988 over the previous year, imported French champagne by 40%. Sales of luxury furs and perfumes increased at a 20% yearly average, while acquisition of expensive jewelry increased by nearly 50%.(2) The new elite’s point of reference was the already wealthy and powerful in Spain, but even more so their European counterparts.

The establishment of responsible credentials in the eyes of the local and foreign bankers and investors was presented as an economic strategy. High growth of profits was a sign that the economy was doing well. The success of the new class was converted into the success of the whole society.

Hence the December 1988 general strike represented the supreme irony. The new class and its academic ideologues had proclaimed the end of class politics, denying the relevance of class consciousness in the day-to-day life of the working class. In reality these upwardly mobile professionals were themselves so deeply embedded in their new class roles that they “understood” only one class – the ruling class with its power and prerogatives, of which their own policies and life styles were the imitations.

The Emerging Class System

Under the Gonzalez regime, a clearly identifiable three-tiered class system is emerging, one in which sharp socio-economic cleavages define social opportunities and political access to governing circles.

At the top of the hierarchy are the banking, real-estate and speculative groups, combining old wealth and the upwardly mobile nouveau riche Socialists. They are joined by corporate executives and lawyers, auxiliaries of the multinational corporations who increasingly operate on the industrial terrain. Finally, there are the high-placed state technocrats and executives who manage state enterprises and financial institutions, as well as controlling the allocation of state contracts. Together, this corporate-political elite makes the key decisions affecting the distribution of national income.

In the middle are the professional classes — the lawyers, civil servants, parliamentarians and other elected officials that react to the policies and decisions made at the top. it is here that the noisy debates on the effects and costs of the elite policies are discussed, ritually debated and legitimated, providing a democratic gloss on the highly centralized power structure. Neither the governing, party nor, for the most part, the parliamentary opposition challenges the power or the prerogatives of the non-elected officials and their corporate associates. And, in most cases, the middle layer fails to link the public to big decisions.

The primary role of the government party is as a transmission belt of President Gonzalez and his inner circles: theirs is not to debate and decide, but to do his bidding exactly as they have been told. It is striking how much the PSOE is in fact a party of state bureaucrats. In fact, it is hard to conceive of the very existence of the ‘Party’ outside the state machinery. This close identity of party and state marks a further instance of the similarities and continuities of the post-Franco Socialist regime with its corporatist predecessor.(3)

Even more to the point is the use to which the centralized command structure is put the continual effort to subordinate the trade unions to the state. The General Workers Union—Socialist Confederation’s (UG1) partial break, its affirmation of autonomy of action and, even worse, its decision to criticize and strike against the party-state was considered a breach of party discipline, and serious thought was given to taking administrative and disciplinary action.(4)

At the bottom of the political-economic hierarchy is the alienated populace, subject to incessant propaganda from regime-controlled mass media, distracted by state-sponsored spectacles and divorced from the state-manipulated organizations of “civil society.” The populace is increasingly disenchanted by the widespread greed and corruption that characterizes the upwardly mobile functionaries. They deeply resent the ostentatious life styles of the top echelons of the new classes: their Mercedes Benzes, their partying at fashionable resorts, their photos on the covers of the glossy weeklies, their toothy smiles with the bankers, corporate executives, celebrities and aristocratic jet-set riffraff, all amidst an employers’ assault on the most basic condition of labor — security of employment.

In addition to the 20% out of work, the temporary work force has increased from 16% to 24% in the last few years of the Socialist regime. Nearly 30% of Spaniards, some 11.5 million, have incomes inferior to 500,000 pesetas a year (approximately $4,000), putting them below the poverty line.(5) While profits doubled between 1986 and 1987, the regime refused to allow salaries to be raised by two percentage points to compensate for the increase in inflation, claiming the need for restraint to hold it down.(6) These gratuitous insults finally transformed the general malaise of the labor force into open revolt, as between 85% and 90% of the entire labor force closed down the country.(7)

Merger of Old and New Right

During the period of Socialist rule, Spain has experienced a dual process of social convergence and polarization in which traditional cleavages between the pro-Franco economic elite and the post-Franco Socialist regime have virtually disappeared, even as the socioeconomic class divisions between labor and capital continue and even deepen.(8) What has become obvious to the Francoist right (The Alianza Popular), bankers and business people in general is that the Socialists have provided a better business and investment climate, holding down wages with less conflict than any rightist regime could have expected. Indeed the Socialist Party’s appropriation of the center-right political space crowds out the traditional right.

Since big business far prefers to have a pro-business party in power to one out of power, the right flounders in a deep crisis of identity.(9) The Socialists have stolen the old right’s economic program, while continuing to sell itself to a substantial sector of the electorate as some sort of liberal progressive alternative. Still, the belief that the Socialist Party is a reformist party that has been led astray, and that Felipe can be convinced or pressured to take a “social turn” (giro social) is fairly pervasive, at least in certain Socialist trade-union circles.(10)

An army of ex-leftist intellectuals have provided the ideolo1ogical mystification for this process of social regression.(11) Their job has been to sell the pro-investment, anti-labor programs of the Socialists as the only “possible” realistic program open to Spain, given its constitutional system, the need to integrate into Europe, Spain’s underdeveloped nature, the threat of a military backlash, the problem of modernizing the country, etc.

In their presentation and analysis of the Spanish power structure, the ex-leftist ideologues of the new right focus on the middle levels of power they delve into the everyday decisions, the electoral process, the parties, the personalities, the voters – all the noisy events that fill the pages of the daily opinion columns. In the meantime, the impersonal institutions (the boards of directors of the leading banks and corporations, the technocrats and economic advisors), which make the crucial decisions affecting the class structure, remain in obscurity. The new right’s imagery of a society of free elections, competitive markets, social opportunities and consumer affluence masks the politics of elite decision-making and the abysmal inequalities it has produced.

In one area, the Spanish Socialist Party has been successful: it has devalued socialism, emptied it of meaning, and transformed it into a state ideology legitimating the new privileged ruling class, that fusion of upwardly mobile professionals and new rich bankers.

The Socialists’ move to the right provides an objective basis for the revival of left politics: in the political gap between the bureaucratic party-state and a steadily more alienated populace; in the social gap provoked by increasingly concentrated capital and an ever more insecure and vulnerable labor force; in the economic gap in which the economy offers everything to the new upwardly mobile political class and little or nothing to the mass of young unemployed.

The mass of reformist working-class and petty-bourgeois voters who are, for whatever reason, not likely to support the Communist Party do not have a political vehicle, at least in the electoral arena. The fact that the great majority of the active population – over 10 million — had to take to the streets on December 14, 1988 reveals the degree to which the electoral system has failed to provide a forum for representing the majority’s interests. It is false to equate an electoral regime with representative democracy. Democracies require elections, but not all electoral regimes are democratic, subject to a sovereign popular will.

The challenge for the Spanish left is to recreate a critical public, to demonstrate that the alienated populace possesses a collective power and is capable of isolating and confronting a Socialist Party that is a party of functionaries. A revived left would recapture the tradition of class solidarity as a condition for – as well as a consequence of – collective struggle.

Above all, the left must displace the dead hand of the state bureaucracy in civil society and reconstruct the autonomous movements of the 1970s. There is no way that the industrial or farm workers, intellectuals or academics can effectively fight the state party machinery while depending on subsidies and handouts from it There is no automatic conversion of objective to subjective realities. The decay of the old does not necessarily create the new.

Only sustained action by consequential militants can fill that enormous vacant space and create a popular socialist movement representing the hopes and aspirations that have been frustrated in this decade The general strike was a big first step in that direction.

Decline of Civil Society

During the last stages of the Franco dictatorship and in the period of transition to the electoral regime, a rich array of social movements emerged that engaged vast numbers of Spaniards — particularly workers, neighborhood activists, students and intellectuals — in active struggles, public debates and critical discussions. Membership in secondary associations flourished, trade-union membership skyrocketed and intellectual journals and pamphlets proliferated.(12) Civil society grew as the state apparatus retreated.

Particularly with the Socialist takeover of government, the process was reversed: the central thrust of policy was toward the “incorporation’ of social movements into the state bureaucracy. The electoral party apparatus transformed movement activists into functionaries. Ex-activists-turned-bureaucrats demobilized the autonomous organizations or transformed them into appendages of the state, atomizing their supporters and turning them into claimants for state favors.(13)

The Socialists in particular, with their personality cult around Felipe Gonzalez and their vacuous slogan of change (cambio), debased socialist values and reduced political discourse dramatically. Playing on the populace’s genuine fear and hatred of the Francoist right, Gonzalez and his entourage posed the issue of politics as one of placing public trust in the power of the central state. The Socialists contributed to the decline of public debate, substituting the central state and the mass media for the autonomous collectivities based on personal exchange, meeting on a daily basis, acting in solidarity.

The reassertion of the state over civil society through the electoral regime and the reassertion of control over social organizations led to concerted efforts to subordinate working-class demands to the capitalist state in the name of “consolidating democracy.” Every wage demand, strike and mass mobilization was declared to be “endangering democracy,” threatening to provoke a military reaction, etc.

The whole burden of renewing capitalism and strengthening the state apparatus was placed on the backs of the working class with the active support of the Communist Party. The Moncloa Pact (October 1977) formalized the process by which the upwardly mobile political class and the subordinate trade-union functionaries were able to gain access to public office, perquisites, budgets, legality, and respectability — at the price of demobilizing the working class and strengthening the state’s control over civil society.

What was (and is) described as “consolidating democracy” obscured a more complex and basic process: the consolidation of capital, the strengthening of capital’s control over the state, the strengthening of the state, the implementation of regressive income policies, the attacks on trade-union rights, and the closing of major industries that were strongholds of worker’s militancy.

This shift in class power engineered by the Socialist regime manifested itself in a precipitous decline in trade-union membership and the weakening of both collective bargaining and the capacity to strike.(14) By understanding the process through which the electoral regime concentrated power in the capitalist state, we can explain the apparent paradox whereby wage and salaried workers had a greater capacity to increase wages beyond inflation and productivity in the latter phase of the Fascist regime and during the transition to the electoral regime than dining the rule of the PSOE.

The electoral regime’s consolidation coincides with the establishment of bourgeois hegemony.(15) The process took the form not only of providing guarantees to property and investor classes, but of decreeing and legislating positive measures regarding labor, investment and income policy. By dismantling existing state regulations, providing generous state financing and promoting the privatization of industry, the Socialists ensured the continued strategic support of capital.

Efforts by labor to improve living standards in the early years of the Socialist regime were condemned as “destabilizing democracy. As it became obvious that bourgeois hegemony was secure, the Socialist regime shifted the axis of its arguments for supply-side economics: The labor movement was then told that “restructuring the economy,” implanting the new “modem” economy, and creating competitive conditions for entry into the Common Market required that labor incomes continue stagnating or regressing and that returns to capital keep growing.

Thus by the late 1980s, the majority of the labor movement recognized that the pm-business attitude of the Socialist Party was not a clever tactic, clearing the way for a social democracy that would provide welfare reforms, nor a temporary measure to deal with a cyclical crisis of capital, but a strategic commitment based on interlocking interests raised to the level of state power.

The “discovery” of this historic relation was gradual and uneven.(16) Even as the plans for the general strike were unfolding, Socialist trade-union leaders were hoping that Gonzalez would rectify his course, or that as a result of the strike the regime would take a “social turn.” The latter point is important because it indicates the degree to which the relentless move to the right by the Socialist regime has moved the axis of political debate in the same direction.

The demands of the opposition trade unions and the basis of the general strike were very moderate by any gauge: to recover two percentage points in living standards lost when inflation exceeded government guidelines; the rescinding of a Socialist youth-employment scheme in which the state subsidized 80% of the private employers’ wages (with no social benefits) — a project that would have undercut the very existence of union organizations and collective bargaining and an increase in the percentage of unemployed covered by unemployment insurance.(17)

In a sense, the unions and the opposition are struggling to conserve their shrinking space and living standards against the extremist, neoliberal onslaught.(18) Even if the regime conceded every point, it still would not represent a “turn” toward reformist social-democratic welfare politics; it would merely slow down the rush toward a completely neoliberal economy.

The electoral regime in Spain had been 1) explicitly conditioned and predicated on the political class following the rules dictated by the permanent state apparatus; and, 2) dependent on creating the conditions for capitalist reproduction.

The authoritarian and elitist foundation of the electoral rules of the game help to explain the electoral regime’s reproduction of the same style of politics as its Francoist predecessor The Socialists practice the same centralization and concentration of legislative and executive power. They have encouraged the emergence of personal power (the caudillo), ministerial disdain and arrogance toward parliamentary interpolators, the strong drive to bureaucratize civil society, the continual effort to transform the trade unions into appendages of the state and state dictation of wage-salary increases.(19)

There is even significant carryover of economic policy advisors and foreign policy makers from the Franco era into important sectors of the Socialist regime.

There are, of course, many significant differences between the Franco and electoral regimes; far more individual rights in the latter and greater job security and economic protectionism in the former, for example.

The coincidence of styles and forms of politics reflects continuities in the underlying substantive structures. But while in Spain and elsewhere, left-wing writers have criticized the negative effects of subordinating class politics to the ‘consolidation of democracy.” they have done so from a narrowly focused perspective.(20)

The critics have identified the problems generated by “neocorporatist” policies. Cooptation of the political opposition and trade-union leaders and state absorption of civil society leads to the deterioration of trade-union influence and membership, declining wage earners’ income, greater employment instability and rising unemployment In empiricist fashion, these critics attribute such problems to neoliberal policies or ideologies. However, the ascendancy of a neoliberal political economy must be located deeper within the very structure of the state, more specifically in the relationship between the electoral regime and the state.

The very foundation of the political transition – the securing of bourgeois hegemony as a necessary condition for the emergence of electoral politics – was the basic determinant of the neoliberal socio-economic policies. The critics became hostages of the regime because they share the latter’s premises about the “classless” nature of the electoral regime. They subordinate their socio-economic or class criticism of regime policies to the sacred cow of the electoral regime (consolidating democracy), thus contributing to the disorientation of the labor movement and reinforcing the basic premises of their ostensible adversaries.

Ties That Bind International Circuits

The neoliberal economic policies pursued by the regime are primarily directed to strengthening the international circuits of capital. A new set of institutions and policies organized around recently privatized enterprises provide the services — transport, communications, education, etc. — facilitating the reproduction of the privileged businesspeople, entrepreneurs and public functionaries connected with these circuits. The state’s role is to subsidize and protect these circuits and their participants(21) while circuits based in the internal market (including public services for wage and salaried employees, local businesses and industries) and linked to older productive sectors have been squeezed.(22)

The regime has allowed factory owners greater leeway in firing workers and sub-contracting production to small shops and home industries, thus lowering their labor costs.(23) In effect, the costs of competition in the “open economy” have been shifted from local capital to labor, thus allowing capital to retain a high profit margin, while international capital expands its links to the Spanish economy.

The costs to labor have been extremely high. Home workers lack any social protection, legislation or health protection: the fumes from chemicals (glues) in the making of shoes, for example, have led to numerous reports of toxic-induced illnesses. Contract workers are non-unionized and essentially temporary workers lacking any collective bargaining rights.(24) The multinationals, in turn, draw their work force from a huge, unemployed labor pool, which weakens existing union organizing and limits for a time the propensity to strike.

Moreover, this shift from protected national industrial growth to the internationalization of the economy has stimulated a massive shift of Spanish capital from productive to speculative real-estate and financial sectors.(25) Non-productive investment has been the fastest growing sector over the past several years and its growth has outstripped the productive base, creating a false sense of prosperity: high growth and high unemployment Spain is now one of the major poles of attraction for all sorts of “hot money,” as its banking and investment laws ask few questions, exercise weak regulation and provide easy opportunities to launder money. Hence, Spain has become one of the favorite investment sites for Latin and European narco-capitalists.(26)

This is accompanied by a dual policy of promoting both high technology in specified industries as well as low-paid, labor-intensive industries, ostensibly to absorb redundant labor displaced by the former Some cases, such as the steel mills in Bilbao, combine both processes: small groups of highly skilled workers operate the computer controls, a second group of permanent workers feeds the furnaces, and a third, growing group of non-union temporary workers sub-contract for the dirtiest, most hazardous work. The state’s efforts to promote the integration of Spanish capital into the international circuits are matched by its efforts to fragment labor at the bottom.

The growth and prosperity of the international service circuit is matched by the deterioration of the public-national circuit. The state has launched several attacks (“efficiency campaigns”) on public education, posta1 and transport workers – all of whom are subject to cuts in employment and salaries but who have, in some cases successfully, resisted the state through strikes and collective action.

The entire notion of the public sphere has been under attack by the Socialist regime. Its strategy has been to induce reductions in funding, resulting in deteriorating services, provoking user discontent, and then using that discontent over declining services as its excuse to both attack public ownership (“inefficiency”) and promote privatization of public services.

Socialist ideologues have invented a discourse to legitimate the subordination of the working class to Spain’s new role in the international division of labor. The transition from factories to banks, from machinery to hotels, from factory to home production, all is subsumed under the vacuous phrase: “modernization.”

Regime ideologues sense the desire among many Spaniards to escape the traditional constraints of the past, involving repressive personal codes as well as authoritarian institutions “Modernity” connotes the promise of freer life styles, escape from class rigidities and access to a greater variety of consumer goods. In fact, the Socialist socio-economic policies promote the demise of the older constraints and the construction of newer ones, in some cases equally or even more confining constraints of unemployment for young people (40%), insecurity of factory employment (26%), and marginality in home industry.(27)

The freedom and mobility associated with modernity is confined to the 20% who are well-entrenched in the new networks and circuits. Modernity is the ideological justification of the upwardly mobile professionals. They generalize for a society what is in fact a class-based phenomenon.

Likewise, the Socialist regime’s ideologues have taken advantage of Spaniards’ desire for Northern European living standards and similar political freedoms to introduce an Europeanist ideology that promotes the subordination of the Spanish economy to the needs of European capital.

Becoming “European” means accepting multinational control of the vital transport industry. Becoming European means restricting the Galician fishing fleet’s catch to accommodate the EEC. Becoming European means undermining the Catalan dairy industry through EEC imports. Trading on consumer preferences, the Socialists undermine the national productive sector and promote the international circuit the links between European and Spanish banks, real-estate developers, tourist resort builders and speculators— the groups that provide meaning to becoming “European.”

The military has become an important component of the “international strategy” of the Socialist Party. Integration of the Spanish economy into the international circuits requires a military capable of fulfilling Spain’s new role as junior partner in policing European interests— hence the Socialist proposal to create a version of the rapid deployment force to intervene in regional conflicts.(28) Second, the military is an important element in the Socialists’ centralist development strategy, particularly as regional inequalities and national claims intensify.(29) Third, inasmuch as the Socialist Party does not exist as a mass party in the Northern European (or even Italian-Greek) sense, the army stands as a necessary back-up support against any substantial challenges to the neoliberal policies.(30) This is not as farfetched as it seems; malaise and restiveness among the Spanish labor force is growing.

In the new political order that the Socialists hope to consolidate, the state is subordinated to bourgeois hegemony, the political class to the state, and civil associations and social organization to the political class. The model for the Socialist Party is the Institutional Revolutionary Party (PR1) of Mexico.

Concentration of Class Power

Just as it is a misconception to consider the Socialist Party within the reformist workers’ parties’ traditions, it is equally erroneous to consider what the Gonzalez team describes as “economic restructuring” or “reconversion” as part of an effort to technologically upgrade the economy. A survey of the application of state policies associated with “restructuring” reveals that it had little or nothing to do with developing the means of production or introducing high technology (except in isolated pockets) and a great deal to do with transforming the social relations of production.

The Socialist party and regime was most suited to engineering this transformation — a political and social process in the first instance— because of its working-class credentials and the confidence vested in it by the working class. But over time, the adverse impact of the regime’s policies began to affect not only militants of the left but also Socialist trade unionists. A perceptible gap developed between Socialist trade unionists whose loyalty was primarily to the party-state apparatus and those who, in one form or another, felt obligated to respond to the rank and file as their membership shrank and they began to lose elections in larger firms.(31)

By the middle of 1988 even the Socialist trade-union officials were publicly acknowledging that the whole program of economic sacrifice was not temporary and symmetrical, but strategic and unequal; they consequently shifted their alliances from the party-state to their counterparts in the Workers’ Commissions.(32)

Absent from the Socialists’ list of concerns is the transformation of Spain into an industrial and agricultural center. Spain under the Socialists is a classic case of growth without development. The relatively high economic growth over the past couple of years— celebrated in the mass media both in Spain and abroad(33) — is largely based on imports, foreign borrowing the entry of “hot money,” expansion of financial and real-estate services, and consumer spending.

In great part, Spain’s growth is based on a fragile and shrinking productive base and is increasingly dependent on external financial and technological sources. Growth has been unevenly spread, located in specific enclaves identified with financial and real-estate capital, largely the Costa Brava, Madrid, the Gold Coast and Barcelona. Growth enclaves and assembly-plant sites, mounted by foreign subsidiaries of the multinationals, predominate in these “growth” poles. Growth under Gonzalez has not meant the creation of local autonomous sources of design, research and development. Nor has overseas borrowing of technology led to adaptation and innovation – merely enduring dependence.

In summary, the Socialist policy — despite the economic jargon of its economic team — is not developing the means of production and generating new technology. There is a profound absence of a truly technocratic group; rather, those in command of Spanish economic policy are basically politicians concerned with consolidating control who are more effective in managing power than in developing productive forces.


The emergence and trajectory of the Socialist regime is intimately related to the accumulation process in Spain. It came to power in the midst of the crisis of a national-industrializing model, a time of rising class struggle – massive strike waves, urban and rural protests and military unrest – and economic stagnation. This crisis of the Francoist “national-protectionist-industrializing” model contained within it socioeconomic forces for the transition to the new neoliberal model, which has been outlined in this essay.

The crisis in the old model of accumulation represented a threat to the very process of accumulation; to overcome the crisis required the restructuring of the capital accumulation model to ensure the continuation of the process. The restructuring of capital and its transitions do not happen through the invisible hand or impersonal forces of the market; they occur because of the action of class forces. In reality, models of accumulation reflect configurations of class power. Restructuring accumulation models involves the re-ordering of the ruling class.

The Gonzalez regime, forming a new power bloc of bankers, multinationals, importers, and tourist and real-estate speculators, began to “restructure” class, state and economic relations to accommodate the new model of accumulation. To overcome the crisis and implant the neoliberal model necessitated subsidies and financing of industrial capital to cushion the shocks, while the working class was divided between older workers who received lump sums of severance pay and younger workers who were marginalized.

Once implanted, the new model and its restructured dominant class proceeded to expand on the basis of foreign investment, technology and financing, expansion of financial and real-estate capital, and pockets of high-tech industries. Profits increase and capital in vests, but the new model operates on the basis of a large surplus labor force and the growth of temporary employment.

These features are not products of a conjunctural crisis of the neoliberal model; they are inherent features of its expansion. The model depends on cheap and docile labor to attract foreign export-oriented industries. And the financial, real-estate, construction and tourist industries require seasonal labor.

Left-wing analysts who continue to write about the “crisis of Spanish capitalism” misread the products (unemployment and temporary labor) of the earlier period and fail to see the integral role they have played in capital’s emergence from the crisis. They are referring to a crisis for the working class, not of the system — unless the workers acting on their crisis and through massive class action affect the accumulation process. The normal functioning of the new model is based on this class-centered crisis.

Working-class struggles have already twice broken with the projects of the ruling classes. The first wave of militancy from 1976 to 1979 broke the back of the corporatist vertical organization imposed by the Franco dictatorship. The rise of the Socialist Party and particularly the ascendancy of its neocorporatist liberal wing, however, once again led to efforts to encapsulate the labor movement in vertically controlled trade unions through social contract pacts (1982-86).

The deterioration of socio-economic conditions, the rupture of the trade unions’ pacts with the state, and the organization of autonomous class action may augur a new post-corporatist phase of class politics. It is too early to predict the end of the corporatist cycles, as the Socialist Party is still intact and the Socialist unions (UG1) still retain important collaborationist elements from the recent past Nevertheless, it is possible that, as the leaders of the two major federations said following the general strike: “Things can never be the same again.” Perhaps the iron chain linking the trade unions to the party, the party to parliament, parliament to the executive and the executive to the caudillo has been broken at its weakest link — its ties with the working people.

That is the beginning of hope for the renewal of the Spanish traditions of class solidarity and struggle, along with a vision of society based not on the self-centered claims of the upwardly mobile but on the needs of the great mass of Spanish working people. Neither the Francoist old right nor the neoliberal Gonzalez new right offers any meaningful programs to meet these needs. A new Socialist movement is waiting to be born.

Epilogue (June 1990)

The moral-political crisis has reached unprecedented proportions in 1990: Massive corruption pervades the highest levels of government and extends to both the regional governments and the opposition. The brother of Vice President Aiphonso Guerra, Juan, was indicted after his ex-wife turned over his accounts to the opposition. Juan Guerra went from a door-to-door book peddler to a multi-millionaire in two year s by using the Vice-President’s office to arrange real-estate deals, government contracts and the like.

The right-wing Popular Party has in turn organized a national network to funnel kickbacks on local government contracts to its party coffers. The Catalonian Democratic Convergence government party has been skimming the state lottery to finance its activities. Even the Catalonian Communist Party has been selling off its donated cultural patrimony (such as art works) to finance electoral campaigns. And nobody resigns. Under the PSOE’s unregulated free-market capitalism, corruption is the norm.

The Communist opposition has made some gains, but the trade union leadership has not followed up the General Strike of 1988 with any sustained mobilization. Instead, under pressure to maintain unity within the UGT, it has chosen to negotiate with Felipe Gonzalez over marginal issues. As a result, cynicism and apathy has marked the attitude of a militant working class.

Despite massive state spending for 1992 — on the Olympics, the celebration of the Conquest of the Americas and the elimination of tariff barriers in the Common Market, the Spanish economy is slipping into recession and wage austerity remains the policy of the regime. The abysmal failure of Spanish Socialism to meet the most basic needs of the majority and to curtail the orgy of corruption in its ranks marks the definitive end of Spanish social democracy as a democratic reformist alternative.

How ironic it is that PSOE intellectuals like Manuel Castells can write about the failures of Communism while ignoring his friend and colleague Felipe Gonzalez’ betrayals of the working class. The revival of revolutionary democratic socialism will require both a new political movement as well as leadership and intellectual interpreters so that the point of this irony might be fully driven home.


  1. Gonzalo San Segundo, E1 dinero, la nueva fura de Ios epanoIes,” Cambio 16, No. 87Z, Aug. 15 1988, 14-19; El Periodico (Barcelona). Nov. 30, 1988, 41. Epoca, a weekly, suggested that the acronym for the Socialist Party become the Spanish Socialist Entrepreneurial Party (instead of Workers Party); Epoca, Sept I2, 1988.
    back to text
  2. Gonzalo San Segundo. op. cit., 17.
    back to text
  3. For a comparison see J.L. Gonzalez Faus, “Carta a Felipe Gonzalez,” El Pais, September 24, 1988, 16.
    back to text
  4. El Pais, Dec. 3, 1988, 18; El Pais, Dec. 11, 1988, 14.
    back to text
  5. El Pais, Aug. 30, 1988, 35.
    back to text
  6. A study of 4,300 firms by the Bank of Spain showed that aggregate profits increased from 423,500 million pesetas in 1986 to 856,211 million pesetas in 1987. At the same time Spain continued to have the second lowest social expenditures as a percentage of gross domestic product among Common Market countries. On profits, El Pais Nov. 16, 1988, 49 and Dec. 12, 1988, Business Section 2; on social expenditures Dec. 3,1988, 59; on pensions and sa1ary ajustments Oct 28, 1988, 61. The Gonzalez regime’s social expenditures as percent of GNP is less than Thatcher’s18% to 22.8% and distant from Holland’s 32.1%, West Germany’s 26.4%, France’s 28.4% and even below Italy 26.4% and Greece’s 20.2%.
    back to text
  7. Figures for the general strike show that 89.5% of workers, 75.4% of farmers, 91.1% of the commercial sector and 82.7% of the administrative employees went on strike. El Periodico, Dec. 16, 1988, 8. An indication of how out of touch the Socialist leadership is with reality was its estimate of the number of participants in the Madrid demonstration following the General Strike. Most newspapers estimated it at hundreds of thousands, “a monstrous demonstration” according to El Periodico, one million according to the organizers. The Gonzalez-controlled media gave the figure of 40,000; El Periodico, Dec. 17, 1988. 3.
    back to text
  8. The wage and salary share of national income has declined substantially during the Gonzalez years from 522% in 1962 to 49.9% in 1986, while the share going to non-salaried income increased from 45.8% to 50.1%. Further labor conflict declined from 18.9 million labor days lost in 1979 to 2.7 million in 1982 and 3.2 million in 1985. The decline is one indication of the Socialist capacity to subordinate labor to their economic project without any commensurate payoff wage increases consistently lagged behind the consumer price index: 12% to 14.4% in 1982, 11.4% to 12.2% in 1983, 10% to 113% in 1984, etc. See Joan Martinez-Alier and Jodi Roca Jusmet, “Economia politica del_corporat!vismo an el estado espanoI. Del Franquismo al posfranquismo, Revista £spanola de Investigaciones Sociologicas, No. 41, enezo-marco 1988, 50, 54. Unemployment insurance which covered 46.7% of the unemployed in 1978, reached only 28.9% in 1987; Evolucion Social en Espana 1977-1987, Instituto Sindical de Estudios, 1988, 27.
    back to text
  9. La Crises de la derecha in El Pals, November 3, 1918 (supplement “Temas de nuestra epoca, 1-8.
    back to text
  10. Both Nicola Redondo, the Secretary-General of the tJCT and Anton Saracibar, its Organizational Secreary, were hoping that the Gonzalez regime would see the light and realize the “social turn” after the General Strike. Their hopes were dashed in the first set of pos-strike meetings, where Gonzalez simply reiterated his basic position on the need for keeping inflation, wages and pensions within his guidelines. See the interviews with Redondo in El Pais, Nov. 20, 1988, Sunday supplement, 1-4 and with Saracibar in EI Periodico, Dec. 5,1988, 10.
    back to text
  11. It is said that the biggest party in Catalunya is the Party of ex-Communists. Gonzalez’ Cabinet contains two: Minister of Culture Jorge Semprun and Minister of Justice Enrique Mugica. The motivations of many ex-Communists were typified by the comments of the former general-secretary in Extremadura, Eugenlo Triana: “Being a communist I could never get to be a Minister,” El Independiente, Aug. 19, 1988, 7. Many of the ex-leftist turned Socialists have landed in institutes such as the Fundacion Pablo Iglesias or regularly receive consultantships and subventions for their defense of supply-side economics, anti-labor employment schemes and support of the North Atlantic Treaty Organization (NATO). A sample of the style of these organic apologists of the PSOE apparatus can be found in an interview with Ludolfo Paraview, Chief of the Pablo Iglesias Foundation in Independiente, Aug 19, 1988, 8. For a critical view, see Julia Varela, “Revolteo de socioIogos,” in El Pais, Oct 28, 1988, 15.
    back to text
  12. Numerous interviews with trade union, neighborhood and university leaders in Catalunya, Valencia, Andalucia, the Basque country, and Galicia all confirm the view that public activity peaked before the electoral pacts and before the political class consolidated itself.
    back to text
  13. On the cooptation of the trade unions through the ‘social pacts, see the thorough analysis in Joan Martinez Alier and Jordi Roca Jusmet, “Economia politics del corporativismo en el estado Espanol Del franquismo al pos franqwsmo,” DesarroJIo Economico, Vol. 28, No. 109, April-June 1988, 3-37.
    back to text
  14. Interview with Simon Rosado, member of the executive board of the Metalworkers in Catalunya, Nov. 14,1988.
    back to text
  15. For a discussion of some of these issues from the angle of particularistic associations, see Salvador Aguilar, et. al., Interest Associations in the Spanish transition, Jaume Bofill Foundation, 1988.
    back to text
  16. Tensions between the regime and the UGT over incomes and pension policy date back at least to 1985. But the UGT refused to back the General Strike called by Comisiones in 1986. From this period on, relations deteriorated rapidly, and the UGT divided, between a rump of state loyalists increasingly isolated from the membership, and the Redondo faction, increasingly criticized by Gonzalez which began to increase its membership, claiming a growth of 150,000 new dues-paying members between 1986 and 1968; El Pais Nov. 1, 1988, 48. On the conflict between the PSOE and the UGT, see the interviews with Gonzalez, El Pals, Dec. 4, 1988, Sunday Supplement, 1-4, and Redondo, El Pals, Nov. 20, 1988, Sunday Supplement 1-3. The best background on the ‘ruptura’ appears in El Pais, Dec. 18, 1988, Special SuppIement, 1-4.
    back to text
  17. On the workers’ demands leading up to the General Strike, see El Pals, Dec. 1, 1968, 32, for a critique and alternative to the regime’s so-called youth employment scheme. The seven key demands of the trade unions were (1) the replacement of the government’s temporary job employment scheme with one providing stable employment and the same social benefits as other workers; (2) recovery of two points lost to inflation; (3) increase the percentage of unemployed covered by unemployment insurance to 48%; (4) increase of pensions to equal minimum wage; (5) the right of collective bargaining for public employees; (6) increase in the minimum wage; (7) collective agreements for groups whose salary is fixed by the Budget; El Periodico, Dec. 13, 1988, 11.
    back to text
  18. On efforts by the PSOE to destabilize the unions, see El Pais, Dec. 11, 1988, 14; Dec. 3, 1988, 18; on PSOE threats, see El Pals, Dec. 6,1988,13; on the internal Party discussions to deepen the break with the trade unions, see El Pals, Sept. 25, 1988, 15.
    back to text
  19. An article beading just prior to the General Strike captures the arrogant style of the regime: “The Government will unilaterally set the minimum services that will apply in the General Strike,” El Pals, Dec. 10, 1988, 15. And capturing the new spirit of the Iabor movement, the title heading the following day read, “The unions refuse to comply with the minimum services dictated by the government,” El Pals, Dec. 11, 1988, 18. In practice, it was the unions who decided the issue, for a change.
    back to text
  20. See Martinez-Alier and Roca, op. cit. These criticisms are not meant to detract from an otherwise brilliant critique of the FSOE regime.
    back to text
  21. On the regime policies promoting the international circuits, the business pages of El Pals is a good place to begin.
    back to text
  22. El Pais, Business Section, Sept. 25,1988,15; on the transfer of capital from industrial to real estate, see El Pais, Nov. 6,1988, Business Section, 3; on foreign takeovers of key Spanish-owned food industries see El Pais, Oct. 30, 1988, Business Section, 12.
    back to text
  23. On regime labor policy, the most detailed critique is found in Evolucion Social en Espana 1977-87. See especially Ch. 3, “Derecho individual de trabajo,” Part II, La Situacion de los trabajadores — Economia sumerjida, 83-98 and all of Vol. II on the growth of temporary labor and the decline of health.
    back to text
  24. Less than 2% of the labor force contracted as temporary workers under state subsidies became permanent. See El Periodico, Nov. 16, 1988, 33. A study by the Workers’ Commission trade union found more than 3 million workers suffering from stress, with suicides increasing by 37% in the areas of industrial restructuring; El Pcriodico, Aug. 18, 1998, 27. On the issue of social security, see El Pais, Dec. 5, 1988, 48. On “labor flexibility” in the construction industry, see Victor Santos Valenzuela,”’Flexibilidad laboral y empleo en la contruccion, El Pals, Oct 15, 1984, 52.
    back to text
  25. The real-estate speculative boom can be seen in the prices for apartments: a 100 square meter flat in Barcelona has risen from 6.7 million pesetas in 1986 to 14.6 million in 1968. The prototype of the new capital is the kidnapped entrepreneur, Emiliano Revilla, who went from being a sausage maker to being a billionaire real-estate speculator in less than two years.
    back to text
  26. On ties of Socialist municipal officials with narco-capitaJists, see El Pais, Nov. 19, 1988, 15.
    back to text
  27. On unemployment, temporary work and home industry, see Evolucion Social en Espana, op. ciL. One estimate is that 43% of those working in the underground economy are under twenty-three years of age. Women constitute 38% of those so employed. Over one-third of employment is service or irregular.
    back to text
  28. On Spain’s integration in NATO and development of an interventlonary, force, see El Periodico, Nov. 15,1988, 16. Gonzalez’s compromises on nuclear weapons in Spain, El Periodico, Nov.  15, 1988, 17. Socialist sale of arms to Pinochet and South Africa, El Periodico, Nov. 18, 1988, 80 and El Pals, Nov. 29, 1988, 16. Two out of three Spaniards believe that Gonzalez conceded much more to the U.S than was received in the new base treaty, particularly on the issue of nuclear arms. El Pais, Oct 2, 1988, 13.
    back to text
  29. Regional inequalities have deepened and Spain under Gonzalez remains the most centralist regime in Europe. On regional inequalities see El Pals, Aug. 21, 1988. Regarding the continued concentration of powers in thecentra1govemment, onIy France exceeds Spain in budgetary centralization. The Spainish state controls 76.2% of budget expenditures, compared with 55.8% in six federal states and 65% in six unitary states. £1 Pals, Dec 7, 1988, $pecial Supplement, 14.
    back to text
  30. A survey of military officials found that while 56% preferred a democracy, 36% favored an authoritarian regime under certain circumstances. When asked under what conditions the military could take over the government, they cited “political chaos and serious disorder.” About 44% opposed military jntervention under any circumstances. Comparing the Franco and Gonzalez period, 44% believed they were better off under the latter, against 33% who thought it was better under Franco; 23% didn’t know or didn’t say.
    back to text
  31. The role of the Socialist trade unions as transmission bells of regime economic policy was bluntly stated by the former Economic Minister (now bank president) Boye when he told Redondo that “the norm in democracies is that the government takes decisions and afterwards informs the social agents.” Such are the joys of social contracting; El Pais, Dec. 18, 1988, Special Supplement, “La Ruptura,” 3.
    back to text
  32. For a detailed account of the rupture, see El Pais, op. cit.
    back to text
  33. Predictably, a New York Times front page headline read: “With Spain in Common Market New Prosperity and Employment, New York Times, Jan. 15, 1989, 1 and 12.
    back to text

September-October 1990, ATC 28

Leave a comment

ATC welcomes online comments on stories that are posted on its website. Comments are intended to be a forum for open and respectful discussion.
Comments may be denied publication for the use of threatening, discriminatory, libelous or harassing language, ad hominem attacks, off-topic comments, or disclosure of information that is confidential by law or regulation.
Anonymous comments are not permitted. Your email address will not be published.
Required fields are marked *