Bravo Papandreou!
Bravo to Socialist Prime Minister George A. Papandreou of Greece! He stunned the world with his announcement of a national referendum on the next regime of austerity measures demanded by European Union rich nations in exchange for additional loans to the debt-ridden and depressed Greek economy. The referendum has been shot down by enemies in the Greek parliament, terrified of the consequences of any delay in concluding the “deal”.
Bravo to Socialist Prime Minister George A. Papandreou of Greece! He stunned the world with his announcement of a national referendum on the next regime of austerity measures demanded by European Union rich nations in exchange for additional loans to the debt-ridden and depressed Greek economy. The referendum has been shot down by enemies in the Greek parliament, terrified of the consequences of any delay in concluding the “deal”.
EU leaders are threatening “there is only one vote -- in, or out, of the Eurozone”, according to German chancellor Angela Merkel. The next tronche of aid scheduled for Greece has been halted.
Whether or not Papandreou politically survives, the mortification of EU leaders and banks at the thought that ordinary Greek people may get to VOTE on the proposed draconian cuts to their standard of living -- shows the nerve that democracy touches in elites. So far, the EU regime’s affection for austerity has meant massive cuts in pensions and wages, education, health and services, and jobs. And NONE of the magic growth that the market ‘confidence fairy’ (who hates public investments) is supposed to fix, has transpired. The corruption and bribery in vulnerable EU countries have not receded with austerity. Austerity is making all the economies worse, not better: Greece, Portugal, Spain, Italy, Ireland, Latvia, Estonia, and others. Even the UK. Even in the US.
The Minimum anti-Austerity Program.
In fact, the exact opposite policy is the minimum correct one; and the one that will eventually have to be deployed after all the dangerous and indeed corrupt romances and fictions in Republican and conservative talking points have played out.
- Public investment must be aggressively increased;
- there must be more not less democratic influence over national and international industrial policy;
- progressive taxation on the 1% must be increased to help shoulder the burden of these investments;
- government must be an employer of last resort in high unemployment times.
- globally, many are going to have to lose some sovereignty and cooperate more to achieve stability, and to return to shared, sustainable growth.
The banking industry is shocked and offended at the new moral isolation: Oh! the “elegance” of market failures “working themselves out”!! (with taxpayer assistance as millions fall into ruin and poverty) - But their shock and arrogance clarifies for working people their own rights - and duty - to bring their political power to bear on the entire austerity regime. Bank-driven austerity politics - where the 1% increase their wealth at public expense and protection while the 99% are getting poorer - is not compatible with democracy.
Marx and Austerity
Its worth taking a moment to consider the current main social contradictions from a Marxist point of view: that is, from the standpoint of the overall interests of the working class considered in the aggregate, and in terms of progress towards a classless, or at least more classless, society.
An argument for Socialism is inherently embedded in even asking what to do about “Too Big To Fail”.
Too-big-to-fail monopoly privileges and power are in undisguisable conflict with democracy, which cannot sustain the inequities the rich compel society to endure. Inequality and productivity trends prove they are in conflict too with the principle of equal pay for equal work -- which is perhaps the most powerful legal, moral and universally recognized economic principle of equity -- and a derivative of Marx’s most useful slogan of socialism: “from each according to their ability, to each according to their work.” As long as there is a division of labor and people live by consumption and production of commodities, the principle will not lose its force.
In addition, these privileges and power also appear to block the ability of most corporate elites to make accommodations needed to reach a new and more stable market frameworks and infrastructures that can leverage the growth and welfare potential of new technologies. Market incentives alone do not work very well to guide the actual restructuring of public markets themselves Thus they must be divided and isolated in persisting in the failed austerity policies.
Objective Changes In the Division of Labor
There are some fundamental reasons why progress depends for now primarily on public -- that is, more socialist, instead of private initiative, why even minimum sustainable anti-austerity progress and development will mean a significant change in class relationships and alignments.
First, the division of labor in an advanced, services-rich economy is very different from that of predominantly mass-manufacturing economy; which itself qualitatively differs also from the division of labor in an emerging agricultural to industrialized economy. The services-rich economy requires vast, approaching universal, cheap access to very socialized, interdependent infrastructures that service-oriented markets must take for granted. It requires a large number of service producers who can be freed from agricultural and manufacturing because technology and globalization have made them sufficiently productive and cheap. It requires consumers with the incomes and level of culture needed to both buy and provide increasingly skilled services. Why not, if you have the income, pay to have your laundry, housecleaning, meals, financial planning and accounts, politics, charities, memberships and subscriptions, etc, etc. executed or assisted by various useful services and automation, while you focus on your passion? There is no limit to the diversity of services that human creativity can envision.
Second, the emerging division of labor exchanges an increasing number of intangible products -- think anything that can be digitized or copied. Because they can be cheaply copied, these products can never quite be ‘owned’ property in the same manner as physical goods that dominated commercial relations in the 19th and early 20th century -- without very expensive policing: the drug and software industries are examples. In addition, service labor, except where it is homogeneous, involves an input of human capital -- a pre-existing set of skills, knowledge and talents provided or professionalized by education -- but at a real economic cost. Equity in the emerging division of labor requires that compensation include a fair return on this capital over and above any abstract labor power that whose value can be measured in time units per output unit . To the extent markets thrive in this new economy, they will look more like socialism than the capitalism of the 19th and early 20th centuries. It requires an increasing proportion of public goods -- means and tools of communication and collaboration -- to sustain this kind of innovation-rich culture and environment.
Anti-austerity Means a larger Working Class voice in ruling coalition.
A different configuration of class forces than currently is dominant in either major political parties must come into being, and contest broadly for power, to make even the minimum program achievable in the United States. But if contradictions between the 1% and the 99%, between the 1% and democracy, persist, and the recovery engine cannot be market driven, at least for the foreseeable future, the time for the rise of new and stronger solutions within the Democratic Party is at hand. They too may need to consider the consequences of popular referendums on austerity. The path of progress ahead includes alliances with liberal, more farsighted elements of capital -- but labor and popular forces need more seats at the bargaining tables, and you only get that by proving your program wins elections -- and referendums --- better than the blue dogs.
Long ago Greeks helped found the ideals of democracy, even in a primitive era in an economy based in large part upon conquest and slavery. In a profound sense, they will now open a new door on the future of democracy in this new, globalized world. It is a world trapped in a crisis of market failures on such a scale that the institutions and laws inherited from 20th century capitalist relations (which were established in response to the last great crisis and its catastrophic consequences) in both the US and Europe -- seem overwhelmed. They seem unable to self-correct.
A Vast Contest
So, a vast contest is underway across the world. A class and political restructuring of great magnitude, of both global and national institutions is also underway. It is responding to imperatives of the global re-division of labor driven by the wide deployment of advanced technology, economies of scale, new markets in emerging economies, and the vast infrastructures required to support 21st century commerce. These imperatives mix with the inherent instability of capitalism to bring crisis to many institutions and practices associated with a previous historical division of labor.
Objective vs Subjective
The ideological tasks of singling out finance capital as the key focus of reform seemed so much more difficult before the OCCUPY! movement. If it were up to the media, or subjectivity of any kind, the Right would have won the debate from having the means to shout the loudest on TV. But -- OBJECTIVE REALITY in the forms of a) the steadily worsening inequality trends, and b) the inability of capital to lead economic recovery --- has compelled the complete re-opening of the debate that seemed over when the financial reform package passed in the last Congress. But the debate has returned. Now, however, on even more radical premises than before --- premises that reject from the start past privileges and corruptions of concentrated wealth over political and economic life.
The democratization of global institutions formerly run almost entirely by US and European bankers has again reasserted itself big-time in the EU crisis, and the issue is not going away. Witness as Europe went begging to China for funds to support its “deal” to bailout banks! A deal that will impose a 50% loss, or ‘haircut’, on Greek and other bad debt. You see, the EU does not actually have the 1.5 Trillion it pledged on paper to raise. China did not immediately step up to the plate. Stabilizing the Euro is important to China, but they will charge an appropriate political as well as economic ‘price’ for the Chief Stabilizer service when it is needed!
Can Capitalism Fix ItSelf Without More Socialism?
Why capitalism appears in many ‘advanced’ countries unable to raise itself to a new level in response to the global crisis, is troubling many, and not just socialists and communists -- especially since it continues to unfold with no termination in sight. New -- but imminently urgent -- questions arise about just where and how far and deep public industrial policy must go in response to a complex array of challenges: from markets, from the many unknowns in addressing investments in education, technology, science, and the environment in a context of rising population, urbanization, aging and diversity.
In advanced countries the spread of the domain of public goods --- everything from lighthouses to the Internet, police, fire and roads to parks and cultural and sports venues, and urban housing partnerships, and education--- over private consumption becomes a more compelling necessity the more complex and interconnected our society becomes, the more productive our manufacturing becomes, the more dependent we are on each other for labor saving services, the more the literacy, education, and skills of each citizen advances.
But so does the obligation to have more effective means of evaluating, correcting and improving public goods. Public goods have greater and lesser use values but little or no exchange value with which to fix “price”, “cost”, and “benefit/profit” Not every public “bet” on an industrial and economic strategy succeeds, anymore than every private “bet”. When public “bets” fail, however, we must avoid the whole society failing with it -- the fate to which, ironically, reliance on private interests making the big bets is now dooming us.
None of us in the US will likely escape the challenge now before the Greek people. We too must directly confront and turn back the banker austerity agenda. Much of the future we see through a glass darkly. And like in Greece, the landscape here is already strewn with the failures of austerity policies and there are more failures coming.
The Greek referendum crisis exposes the profound truth that the people are their own protection, and that it is our own unity and common ground on austerity that will be the pivot on which the fortunes of all democratic movements may turn.
Yea or Nay
If the Greek people vote down the “deal”, Greek default on its debt will follow. So will the collapse of Greek banks requiring their nationalization and the return to the drachma currency. The currency change will be an immediate 50% pay cut -- maybe even more considering the likely short term panic. But, on the other hand, exports would grow if any financing could be obtained -- but no EU or US bank would do that, so the BRICs (Brazil, Russia, India, China) would likely be new partners.
Its a risky path, and no picnic. There is no escape from globalization. But, because of the banker-led regime at the helm of the EU, Greece acceptance of “the deal” will lead to another 30% austerity program with both pay cuts AND no growth to boot! And a loss of sovereignty too! It will likely have to exit the Eurozone barring the onset of a EU-wide upheaval that took a progressive direction toward greater EU-wide governance, working class empowerment and social democracy. No one knows how far-reaching the consequences of even calling the referendum, never mind it result will be. A rise in the borrowing costs for any of the more fragile EU countries could avalanche into an EU-wide credit freeze, guaranteeing a recession while still in the trough of a depression; avalanche into several nations leaving the Eurozone. Even with hindsight of 2 days, the blindness of the banker regime to the huge threat against the entire EU project inherent in their austerity agenda --- noted by Nobel prize winning economists the world over --- seems obvious. But not to them!
In the meantime, no one should be surprised if the Greek people say no to the austerity referendum, regardless of the consequences of “going it alone”. There is austerity down either path, and fearsome storms too. But in either outcome, the working class of Greece has the best chance to make its voice known and demonstrate that ITS voice, especially when harmonized, delivers the most powerful and wisest song!
