The Rise of the EU Marked the End of the Universal Welfare State. Varela on People’s Histories

In this interview, Agnė Rimkutė (Teaching Fellow at Asian University for Women) discusses with Raquel Varela (Professor of History at the New University of Lisbon) the importance of seeing the working classes as actors in the historical process and the implications of people’s history for our understanding of democracy. Raquel Varela is an author and editor of 37 books on the history of work, development of the social state, the labor movement and global history. Out of these, A People’s History of the Portuguese Revolution (Pluto, 2018) and, more recently, A People’s History of Europe: From World War I to Today (Pluto, 2021) have been translated to English.

Agnė Rimkutė: Let us begin with what by now can be considered a distinct genre of historical writing: people’s histories. Rooted in labor history and histories from below, today people’s histories reach their readers in a colorful thematic variety: people’s histories of revolutions, computing, towns, nation states, the Third World, even the world in general. Your book stands out in a couple of ways. On the one hand, it is a people’s history in a dual sense: not only is it about the ways in which people participated in key events of the 20th century, but it is also written for a broad audience thanks to its accessible voice. On the other, it is not just a history from below. Voices of the people in your book are mediated through the political movements and, at the same time, linked to larger, more abstract historical processes of capitalist development. How would you delineate the different approaches to uncovering the voices of the voiceless? How would you position your work in the current landscape of people’s histories?

Raquel Varela: Seven years after my book A People’s History of the Portuguese Revolution was first published in Portuguese, this is the first time I hear something which I totally agree with, and I had never thought of before. I consciously wrote the book in a way that it could be read by a broad audience and also studied by researchers, but I never thought that a people’s history could combine these two approaches. Which, now that you have said it, looks absolutely obvious to me.

We can speak of a long tradition of social history and histories from below, which were, of course, very prominent in the 20th century, especially in the 1960s and 1970s. These approaches were closely connected with historians associated with the Communist Party in Great Britain, with the journal New Left Review, and with histoire sociale française. What we had at the time was a huge interest in the role of the working classes in history. It was not just anti-positivist history. It was a social history in the sense that it was much broader than political, diplomatic, or economic history. When social history was designed, the idea was that historians were not going to study just the working classes but were rather going to do a broader history that would also include the working classes.

When I am speaking of the working classes, this broad historical notion is very important. Because social history did not focus only on the classical unionized working class from the core European countries but was already under the influence of the anti-colonial revolutions of the post-war period in Africa, from the Cuban revolution in Latin America as well as the Chinese revolution in the East. Moreover, it included the so-called new actors that were in fact not new actors in history at all but now played much more permanent roles, like the new wave of the feminist movement, the ecological movement, the anti-nuclear movement and, of course, the student movement associated with May ‘68. In fact, in this last case we can really speak of a new actor, because of the baby boom and the fact that the sons and daughters of the working class and of the petit bourgeois people for the first time had access to a university education and started to play a new role in history – not just in history, but in the making of their own history. It is one of the more interesting consequences of May ‘68. We also had the Portuguese revolution, of course, which impacted not only the South.

Howard Zinn, the author of the magistral A Peoples History of the United States is the main representative of people’s history. There are different kinds of people’s histories, but people’s history is definitely the daughter of social history and history from below. In my own work, I wanted to focus on bringing classes, fractions of classes, and social movements in order to understand the historical process. Most of the research that was done on the Portuguese revolution is mainly political and institutional. This was a dominant trend in the last thirty years or so in Portugal. I wanted to bring back the classes and the social actors. As I show in A People’s History of the Portuguese Revolution, this even changes the chronology of the revolution.

Previously, the entire Portuguese revolution was explained as a succession of changing governments and coup d’états. I have shown that the changes took place in the workplaces before the change of governments and coup d’états. The changes of governments and the coup d’états were reflections of the ongoing class struggle. 

I did that because I thought that political and institutional history became too much the history of laws and decrees without taking into account the social turn that can greatly help us understand political and institutional history. That is why I wanted to bring the approach of people’s history to the history of the Portuguese revolution.

Your newest book A People’s History of Europe: From World War I to Today brings forward several challenges to the conventional historical narratives established in academic as well as public historical fields. Tracing historical clues, you question the necessity of liberal democracy for the development of gender equality and unveil the complex historical processes concealed by the notion of a “Third World.” While lack of space and time prevents us from exploring all these exciting challenges, I wanted to call readers’ attention to one of them: bringing to light the crucial role economic imperatives played in the emergence and growth of Nazism, as well as the limitations posed by exclusively ideological frames when trying to understand fascism. When following your argument, it was difficult not to think of its possible relevance to contemporary processes in the EU: the emergence of a variety of “illiberal democracies” proceeding without any greater disruption to the economic process of European – and global – capitalism. Would you see such a parallel as relevant for the interpretation of the growing strength of culturally right-wing political forces?

This is a very challenging question. What we can learn from social revolutions in the 20th century is that the bourgeoisie, or, as it is said today, political elites or leaders of the states, had important revolutionary roles at the turn of the 18th century and the 19th century and part of that was still very important in 1848, but after that date what we see in the majority of the countries is that the bourgeoisie was more afraid of social revolutions than of anti-democratic movements.

I think the experiences of Portugal, Germany in the Weimar period, Spain in the 1970s and the dictatorships in Latin America during 1960s and 1970s show that the role of the working classes in fighting for democracy is huge, and so is the role of the ruptures and social transformations. They were not just fighting for better working conditions, public services, public and cultural rights for the working classes, but also for democracy. 

Usually we have this idea, which is very much present in the media as well as in the mindsets of the political parties that ran the states, that people are ignorant and easily manipulated by the states. But when we look to history, if you think of simple things, such as the right to vote, or more complex things, such as defeating a dictatorship, working classes were fundamental to achieving those. 

When I say working classes, I am speaking of men and women, manual and intellectual workers, I am speaking of 70 to 80 per cent of the people who are wage earners. Of course, we cannot be naïve. It is not just the multitude. We have to think about unions, organized sector, critical and anti-capitalist political parties, associations, rank-and-file rooted in the society, other kinds of social movements.

Let’s think about something very new – gilets jaunes, the yellow vests movement in France. The extreme right tried to lead this movement, but it was expelled from it. It became a movement rooted in basic and fundamental things, like having money to live until the end of the month, protecting the farmers’markets, having the right to have a job, to have the chance to live in a house in the city center and not just be obliged to live in the very far outskirts. And, of course, all of this was connected with the price of gas, which is related with transport and communication. All this played a huge role in France. In addition, gilets jaunes were against the Bonapartist measures of the French state.

When we think of the dangers of extreme right governments, as we have now in Europe, in countries like Poland and Hungary, and of course in Latin America, with Bolsonaro in Brazil as the most conspicuous example, we should pick up the examples of the revolutions in the 20th century and be more confident in the potential role of the people in fighting for democracy. I am not confident that the liberal regimes or the state itself can do this, because the extreme right arises inside the state and not outside of it – the extreme right comes from inside a fraction of the ruling classes and from the police or other state apparatuses of repression. I do not think that the European Union will be able to defeat the danger of extreme right either, because the danger of the extreme right arises out of the contradictions of the European Union and the capitalist countries.  The moot point is rather what kind of power we need that could question that kind of a state. 

We may think of the state as the welfare state, but this is not entirely true. The welfarist part is a small part of the state and historically it is connected with the defeat of fascism in Europe. The state is also connected to the necessities of capitalism and the reproduction of the work force: health, education, etc. But when we speak about the state, we speak mainly about two things: collecting taxes and repression. The power of democracy should also be a power against the state based on popular democracy, on rank-and-file democracy, on labor democracy.

In A People’s History of Europe, you trace the origins and development of the post-war European welfare state as well as the dissolution of its universal character into targeted assistance programs and the growing precariousness of labor relations. While the European Union and the European social pact are historically distinct processes, the issues of equality between and within the member states continue to play an important role in the historical unfolding of the economic, social, and cultural life of the Union. What were the key moments of the post-war European effort of “saving capitalism from capitalists”? In what ways can this story elucidate the current levels and impact of social and economic inequalities in the EU?

The main claim I have developed in my book is that the European Union, especially after the turn towards ordo-liberalism in Germany after German reunification in 1990, is trying to defend the idea that there is a connection between welfare and its own construction. I do not think that this is historically accurate, because the welfare state was born of the negotiation between two main classes, the bourgeoisie and the working classes – of course, there are fractions within these classes and heterogeneity within them. The bourgeoisie agreed to secure the right to have a job, social security, and a universal welfare state in exchange for the guns of the working classes. This was the main pact that was signed with huge unions, with the resistance movement in the years 1945 to 1948.

The European Union was an embryonic project in the 1950s. It is an extraordinary project from the historical point of view, if you think about it. 

The European Union remains quite odd in the history of capitalism, because what is supposed to happen between the bourgeois classes in different countries is struggle and competition, and here you have negotiation and agreements. It is quite a project and something that was not foreseen – the success of national states cooperating with each other. But it was a project of the bourgeoisie. 

It was the result of negotiations between different bourgeoisies, not between the bourgeoisie and the working classes. This meant a negotiation between the German bourgeoisie, the French bourgeoisie, and the American bourgeoisie – Jean Monnet was one of the key actors, and for a long time he was responsible for the relations between Europe and the US. The US understood that American capitalism could not survive, or at least it would be much more difficult for it to survive, with a non-capitalist Western Europe. 

Of course, we are already seeing its crisis, because this was only possible when the economic growth was huge after the Second World War. A recent part of this crisis is, of course, Brexit. But the fact remains that European integration brought some kind of agreement after the Second World War, however, that did not happen immediately after the war. The European Union may have started as an embryonic process in the 1950s, but it was only really designed and consolidated in the late 1980s; of course, we had other treaties since that have changed its design, but I would say it was fundamentally in the 1980s that its ordo-neoliberalism, labor market, and capital export market were designed. 

And it was in the 1980s that the welfare state was slowly substituted by the social assistance state, which is the state we have nowadays. When people speak about the welfare state these days, they are not speaking about universal policies towards everyone in the countries. 

There are more and more targeted policies towards the poor people and the working poor, different levels of social services or welfare services according to income. This is the social assistance state; it is not a universal welfare state anymore. 

My claim is that the European Union as we know it now is a product of the 1980s and it is a neo-liberal process of ending the European social pact, ending the welfare state, and replacing it by a social assistance state, ending the right to a job and replacing that with precarity. 

A People’s History of Europe keeps returning to the complex and contingent historical relationship between crises, revolutions, and social change. The book begins with the Revolution of 1917 and approaches its conclusions with considerations on the end of one of the central embodiments of the socialist project, the USSR, in the late 1980s and early 1990s. While there is little question about the revolutionary nature of the events of 1917, the 1990s is approached as a dissolution or collapse about as frequently as a revolutionary process. Could you speak to the question of the revolutionary nature of 1989, and the character of similar revolutions across history?

There is no doubt that what we have seen after 1989 was a wave of revolutions. According to Chris Harman, these are revolutions much closer to the revolutions of 1830 than to 1917: because what we saw was the transfer of property in the “same hands” – that is, within the upper classes – and not a socialization of property. For Harman, this is the key. William Pelz, a great historian who wrote A People’s History of Modern Europe, quotes a joke concerning the fall of the Soviet Union: “from socialism in one country to apocalypse in one country.”

You cannot have socialism without abundance. Socialism demands a highly productive system, the creation of wealth as different from the creation of profit, but in any case, large creation of wealth. This was the idea that was picked up by the Left Opposition to Stalin after 1917, until they were expelled in 1927: because of the backwardness of Russia and after that of the Soviet Union, the revolution could not be successful in Russia without revolutions in countries where the productive forces were much more developed. Objectively, you cannot have socialism if there is scarcity of production, because there will not be enough goods to distribute among the people, which would lead to a form of appropriation by a small faction.

In the case of the Soviet Union, this is what we call bureaucratic sector of the party-state that used this situation in the interest of their own accumulation – although this did not amount to capital accumulation. Stalinism has to be understood as a counter-revolution by looking into objective factors, such as the defeat of the German revolution of 1918-19 and also the revolutions in poorer countries. There is a known and fitting exchange between Julius Martov and Leo Trotsky with Martov saying “now, we have socialism, comrade, but we do not have cows” to which Trotsky supposed to have replied that “without cows, we do not have socialism.” 

The Left Opposition to Stalin believed that the problem with socialism was not a problem of people being selfish, it was not a problem of human nature. It was a question whether socialism was only possible by the overthrow of the state done by an organized party in a revolutionary process of the masses. But this question is only relevant in the conditions of highly developed economic forces. Otherwise, socialism is not possible. This is a necessary condition – though not a sufficient condition, of course, because, as we know, there are so many countries with highly developed economic forces that are strongly capitalistic, although in many ways decayed, systems.

What we saw in Eastern Europe and the Soviet Union in 1989-91 was no doubt a revolutionary process. There were masses taking their destinies in their hands. Moreover, there was a deep crisis of the state within the economic crisis of 1982-84, the so called double deep crisis. When we speak of the crisis of the state and of the elites, in this case the crisis of the bureaucracy, we are speaking of a crisis that is more than economic but is necessarily economic as well. All the revolutions have economic crises at their origins, although there are economic crises without a revolutionary process. 

As protesters were singing in the demonstrations in Leipzig in 1989: “we are the people.” This is an extremely important revolutionary statement, saying that we are the people, and you are governing in our name, but you are not part of us, you are not us. But the political leadership was very fast to react:Western capitalists, mainly German conservative leaders and, of course, the bureaucracy of the former Soviet state. The counter-revolution won very quickly. And these countries have suffered a terrible capitalist restoration. 

It is sometimes very easy for people, even for researchers, to confuse revolution and counter-revolution because they can happen in close proximity. Counter-revolution is not necessarily a bloody process by the army, as we saw in some coup d’états. The Stalinist approach with forced collectivization and forced labor to industrialize, etc., meant another bloody counter-revolution. If you think about the welfare state in 1945, it was also a counter-revolutionary process: it was a way of stopping any possibility of revolution by negotiating the welfare state. This was very similar to Portugal in 1975-76. 

What we saw in 1989 was a typical revolutionary process with a typical crisis of direction. 

This was a revolutionary process without a revolutionary political leadership. This has led to some situations where large parts of the population went from dictatorship, no freedom of expression, and no possibilities to do creative work – the latter is something very important to refer to – to a situation where they had formal freedom, but there was enormous precarity, unemployment, even a dramatic decrease of life expectancy and the quality of public services. 

But we should not blame the masses in 1989 or 1991 for what happened then and what followed from it. We have to blame the lack of leadership on the left for the restoration of capitalism. And we should look at the European working classes: those revolutionary organizations were dismantled after the Second World War and in some cases already in the 1930s. Thus, there was no real support from the leadership of the working classes for a solution in 1989, which could have been, for example, socialism against the bureaucracy instead of capitalism against the bureaucracy.

In 1994, Eric Hobsbawm noted that “the destruction of the past, or rather the social mechanisms that link one’s contemporary experience to that of earlier generations, is one of the most characteristic and eerie phenomena of the late twentieth century.” Your work echoes this appraisal, most markedly by drawing a distinction between history and memory. You challenge the ahistorical and deterministic tendencies of our memory of the 20th century: economic crisis does not imply an inevitable loss of the strength of labor against capital; the fight for social emancipation does not automatically lead to totalitarianism and history has not ended. Could you share your thoughts regarding how this ahistorical state of our memory took root? What has been your experience of writing history in a public and political key in 21st-century Europe?

The victory of neo-liberalism, which is not a victory of all sectors inside capitalism, is part of the decay of capitalism. The process of capitalism’s decay, which was manifested in most obvious form by the level of destruction during the two world wars, is the process of contradiction between the development of labor forces, production forces, democracy, the socialization of production, and the private appropriation of this production. This process has led to the difficulties of capitalism to accumulate wealth without catastrophic crises, which then led to the economic crisis of 1929. And the way of getting out of that economic crisis was the Second World War. 

Franklin Roosevelt’s New Deal did not take the US out of the 1929 crisis, the war economy took it out of it: it transformed the unemployed into soldiers and the immobility of productive capacity into a war economy. The same process happened in the Soviet Union as well as in France, Great Britain and, in the beginning, in Germany too. It is very easy to get out of the crisis when the destruction is of profound capacity: capitalism can then practically start again from the beginning. This is what happened in Europe in 1945 with fresh injections of capital from the US.

There was another crisis in the 1970s and, after that, the crisis in 1982-84. The latter has not received as much scholarly attention as the crisis of the 1970s but, in my opinion, it was even more important. 

In 1982-84, there was no revolution of any kind and the American and European bourgeoisie answered to this crisis by the large restructuring of economy and labor. This process replaced the welfare state with a social assistance state, replacing big companies with subcontracting, the right to have a job with precarity, which is the normal situation of capital accumulation, and relocating some of the big industries to Asia. 

The entrance into the global economy of China resulted into the doubling of the workforce in the 1990s. 

These changes made possible the great increase of the debt system. This became possible after the end of the Bretton Woods system in the 1970s, according to which there should be no obligatory connection between commercial and industrial banks. This led to a huge accumulation of debt, which has exploded in 2008 – and it will explode even more in the coming years.

We are already seeing the so-called refugee crisis, which is a result of the debt system imposed on Africa and the Middle East. We have experienced an almost permanent war economy in the US and the countries that support it since the Korean War of the 1950s. Other countries do the same: just think about the role of Russia in the countries under its influence.

Neo-liberalism is what one would expect at this period of capitalism. It is not that a group of crazy people or psychopaths start driving this perfect bus. This bus is totally uncontrollable because of its contradictions. 

And if you are in a bus that is totally uncontrolled, it becomes most probable that crazy people are the ones who offer to drive it. However, the point is not those men, but that the bus is out of control. 

When I speak of neo-liberalism, I include the social democratic parties as well, I include left and right neo-liberalism. There are almost no differences between such parties nowadays. The propaganda is that there is no alternative, as Margaret Thatcher has claimed: do not think of a socialist regime, because you will end up with totalitarian regimes, so you have to live in this miserable system of inequality.

The socialist moments in history are marvelous and in fact everyone defends them. What is the National Health Service in Great Britain after 1945? It is a process where you have services without accumulation. What is a universal education? It means that everyone has access to the same education, that it does not depend on the money you and your family have. 

We do have important examples that we are much better off and work much better, that we are much more dedicated when we are not under the pressure of competition and when there is equality. In fact, our differences manifests more clearly when we have equality.

Today in capitalism people do not recognize themselves as humans, because they are transformed into a working force. This working force is there everywhere around the world: it is consuming the same things, behaving the same way, using the same language. Differences in creativity, in arts and in sciences are all in dramatic decline as well.

Part of this is related to what has happened in the European Parliament. They have defined what history is. They have said that communism is equal to fascism. Anyone with a little bit of historical background would say that it is quite unbelievable to compare the Gulag to Nazi concentration and extermination camps and that doing so shows a lack respect to the victims of the Holocaust. The Gulag was a system of forced labor, and the Soviet was a system of censorship and lack of freedom. But Auschwitz is not directly comparable to this: it is on a superior level where you kill an entire ethnic population with gas.

The totalitarian approach comes from Hannah Arendt who discussed the concept in connection with the Soviet Union, Nazi Germany, and also imperial colonial states. 

When you compare political regimes, Stalinism and Hitlerism are indeed very similar, however, if you compare states, Nazi Germany is much more similar to the US, which is democratic. 

The concentration camps were forced labor camps, where private companies used this forced labor while the state was a capitalist militarized state. In the case of Nazi Germany, all of this was done in a dictatorship. However, you had capitalist militarized states without dictatorship and without forced labor inside the US, Great Britain, and France. The latter two of which, however, massively relied on forced labor in the colonies until the 1960s whereas in the case of the US, there was a form of slavery in the country, which only ended through the revolutionary process of the Civil Right Movement in the South around the same time.

I think that Arendt’s analysis of totalitarianism is very helpful and should be extended to everyday life, to questions complicity, to how human being behave under such regimes. But we cannot reduce the 20thcentury to the history of totalitarianism. That version of history omits that socialism was destroyed by Stalin. 

We should not be attached to what the European Parliament or any institution defines as history. History is a science and not a subject of political decrees.

The transcript has been edited for length and clarity.

In collaboration with Vilius Kubekas and Ferenc Laczó.

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