Carl Rowlands: A Brown Old Deal?

“We’re the slaves of the phony leaders

Breathe the air we have blown you.”

The Punk and the Godfather, from Quadrophenia by The Who

The Progressive Economy Foundation recently held an event in Budapest called a ‘Green Jobs Summit,’ featuring an assortment of Hungarian social democrat and green politicians including Gordon Bajnai, Andras Schiffer, Javor Benedek and Imre Szabo. Whilst the assorted journalists were perhaps most interested in Gordon Bajnai’s attack on Fidesz for commissioning a huge expansion to the nuclear power plant at Paks, perhaps the most interesting contribution was provided by Reinhard Butikofer, president of the European Green Party, who gave the opening address. And it was probably more interesting for what he didn’t say about growth and jobs, rather than what he did say.

According to Mr Butikofer, there appear to be two types of growth – ‘brown’ growth, which features the financial services and pollution, and ‘green’ growth, which is all about renewable energy. Yet missing from this analysis appeared to be a full description of what growth actually is, when it is defined as GDP on either a European or a national level.

We can say, for example, that the first period of industrial growth featured ‘productive substitution’. New use values were found within technology, in first phase of industrialisation. Mechanisation and automated processes supplanted individuals and their manual skills.

Yet the service economies of many modern European states cannot any longer use this as the basis for growth. They might derive some growth from ‘relative substitution’. For example, outsourcing and subcontracting might result in an increase in GDP. Growth has been generated in the UK by the divestment of government services into the private sector. In this situation, growth is about exchange value rather than productive value. The prices of property are crucial to any prosperity which may exist. But such a service economy can also pursue approaches which result in zero-sum outcomes. Hungarian workfare, whilst being indefensible from any ethical perspective, also doesn’t result in any growth to GDP which can be ascribed as significant. On the other hand, the relatively strong growth in the UK can be partially attributed to a rise in part-time, low-skill jobs.

In this sense, we can see GDP as a ‘black box.’ European GDP fails to account for the dependencies between European states and between Europe and a host of supplier countries. Attribution of growth arguably depends upon ‘captured’ growth – an aggregation of different factors, resulting in the top line of revenue is attributed to a particular country. One example of this is Apple’s iPhone, where export of parts and components from numerous countries contributes to the USA’s GDP. The labour employed cheaply by Foxconn in China plays a crucial role in supporting the existing class divisions in the USA, where the engineers, designers and marketing people are in a different salary bracket to Apple’s retail employees. China’s headline GDP doesn’t benefit from the finished iPhone product, but the real situation is evident from Chinese exports.

GDP doesn’t really indicate levels of pollution, happiness and the different variables around a globalised production process – including the inevitable movement of people as capital flows around the world. Against such a backdrop, a Hungarian Green New Deal would be likely to have specific characteristics. There would, most likely, be a reliance upon Germany to provide the insulation materials and technology to support renewables.

The relationships which underpin growth and modes of production are often unwritten. This means that the global south is seen as peripheral, whereas, of course, it is crucial in the production of parts and extraction of materials. Szalai Erzsebet’s article, ‘A diktatúra indiszkrét bája’ (Nepszabadsag, 2011) is very important in considering the situation of Hungary, as it looks at the granular, disconnected nature of Hungary’s economy.  Talking of European GDP is meaningless. Processes and components are global in origin. Raw materials and heavy metals of electronics are sourced from the South and often manufactured in the East, despite, in Hungary’s economic sphere, being sold or designed by German companies. Green ‘smart’ technology relies on this. We need to consider Europe’s imperial past, and its present status as a recipient of container-port capitalism.

Of course, related to all of this are personalised, even existential questions, studiously avoided by almost all of the speakers at the summit, and only hinted at by Andras Schiffer. What is work? A recurring theme in current British politics is the theme of ‘hard-working people’ – a formulation which avoids discussion of class. The jobs created by insulation programmes are likely to be temporary, project-based. They are likely to involve networks of small companies. The speakers in the Green Jobs Summit all exhibited a worship of SMEs as offering secure employment, versus state and large companies; most obviously, in Javor Benedek’s speech. One suspects that it is only those who have not worked for small companies who would be prone to this fetish. There’s no evidence for an innate superiority of SMEs, but such inclination reflects a  moral preference on the part of Hungarian liberalism. Other Keynesians around the world, such as John Quiggan, have been considering and discussing the working week and restoring value to labour by reducing the supply of hours. It is a shame that this discussion has yet to emerge into Hungarian political discourse.

Andras Schiffer was certainly clear on one thing: that Hungary should not become a simple assembly line. For sure, it’s impossible to think of Schiffer, Bajnai or Javor as workers on an assembly line. Perhaps I am wrong, but no-one at this event looked like people who had ever worked in manual employment. Yet without a realistic post-Fordist alternative, many of us would accept work on an assembly line for a large foreign company as a decent alternative to being a ‘small entrepreneur’ living in poverty, or working for benefits.

This leads to the question of the ‘strong’ middle class that so many ‘leftist’ Hungarian politicians and commentators refer to. For Bajnai, Mesterhazy and Zoltan Pogatsa, such references have become mandatory. But it’s hard to understand what this means, and its relevance. The growth of a large administrative middle class in UK depended partly upon imperialism. Even now the large educational sector in the UK is partly dependent upon international students. Or does a ’strong middle class’ involve a reversion to a pre-industrial economy?  In the words of the current governor of Hungary’s central bank, Gyorgy Matolcsy, back in 1999: ‘A former craftsmen’s Central Europe will be revived, re-valuing local markets on the basis of the old Northern Italian, Southern German, Austrian, Swiss, Czech-Moravian and Trans-Danubian craftsmanship. The revival of this craftsmen’s Central Europe will be the revival of the individuals, families and small communities who face a massive world. This will be the revival of the small and the narrow facing the spacious. This will be the revival of the world of the natural and of fantasy facing the world of technology. The age of reason will thus make way for the age of emotions, instincts, inclinations and nature.’

This denial of industrialisation and modernity, combined with a version of divine destiny, might have some appeal to the folk traditions in green politics, such as those remaining in the independent (and in some regards radical) LMP. If only iPhones could be hand-carved from the finest wood. This is not to equate any of the speakers or the organisers of this event with Matolcsy’s kitsch parody of William Morris socialism. However, advocates of a strong middle class should perhaps be advised that there is no ‘real’ security for the middle class anywhere, and that this has always been a defining characteristic point of the middle class. Deploying an idea of an idealised middle class without a robust model of class analysis is useless, and entirely unproductive in any case.

The detailed plans in the MSZP’s and Egyutt-2014’s programme may be welcome, but to have a plan for growth which doesn’t challenge the existing economic settlement in Hungary can only mean that existing imbalances are further perpetuated. Failure to explicitly interpret fundamental economic questions means that the dominant, implicit terms of reference remain unchallenged. All of this can only obscure the fact that the Green New Deal, as advocated by the democratic opposition is fundamentally unambitious in its societal aspirations, and a Green New Deal in a Hungarian context could conceivably do little more than simply provide a green hue to a future austerity programme in Hungary. At least, perhaps it should be made explicit that a genuine Green New Deal might require new forms of economic organisation. At the same time, one wouldn’t want to criticise too harshly. After all, no-one else in Europe is really offering a new growth model.