James Petras: Rise and Demise and the Soviet Bloc!

One of the most striking socio economic economic features of the past two decades is the reversal of the previous half century of welfare legislation in Europe and North America. Unprecedented cuts in social services, severance pay, public employment, pensions, health programs, educational stipends, vacation time, and job security are matched by increases in tuition, regressive taxation, and the age of retirement, as well as increased security are matched by increases in tuition, regressive taxation, and the age of retirement as well as increased inequalities job insecurity and workplace speed up. The demise of the welfare state demolishes the idea put forth by orthodox economists, who argued that the maturation of capitalism, its advanced state, high technology and sophisticated services, would be accompanied by greater welfare and higher income, standard of living. While it is true that services and technology have multiplied, the economic sector has become even more polarized, between low paid retail clerks and super rich stock brokers and financiers. The computerization of the economy has led to electronic bookkeeping, cost controls and the rapid movements of speculative funds in search of maximum profit, while at the same time ushering in brutal budgetary reductions for social programs. The Great Reversal appears to be long term, large scale process centered in the dominant capitalist countries of Western Europe and North America and in the former Communist states of Eastern Europe. It behooves us to examine the system causes that transcend the particular idiosyncrasies of each nation. There are two lines of inquiry which need to be elucidated in order to come to terms with the demise of the welfare state and the massive decline of living standards. One line of analysis examines the profound change in the international environment: We have moved from a competitive bi-polar system, based on a rivalry between the collectivist welfare states of the Eastern bloc and the capitalist states of Europe and North America to an international system monopolized by competing capitalist states.