If the last week’s bizarre political contortions in Greece —
first a referendum, then not, then a government of national unity, now more
uncertainty — were not enough, the spread of contagion to Italy threatens even
greater turmoil. As we arrived in London we were greeted by the Financial Times informing us that Silvio
Berlusconi had (finally) agreed to resign as PM, but apparently in part so he
could maintain a hope of running for the top job yet again in early elections.
The relief among European financial elites that once again
they had imposed political change over the heads of any kind of sovereign
democratic decision-making by the people of individual European nations (let’s
recall that both Greece and now Italy have accepted IMF and European Central
Bank mandarins to “monitor” and oversee their domestic finances), rapidly
crumbled and the Evening Standard
headline by late afternoon laid bare the seriousness of the situation. As one
Facebook friend said, it’s Eurapocalypse
Now.
Perhaps in Australia, where we’ve weathered the worst of the
global crisis, the faltering authority of our political class can appear (only
appear) to be a function of contingent, extra-economic factors, but in Europe
there is no mistaking that it is a crisis of political economy, as
top UBS economist George Magnus was at pains to point out in August,
invoking a famous quote from Karl Marx’s Preface to A Contribution to the Critique of Political Economy:
At a certain stage of
development, the material productive forces of society come into conflict with
the existing relations of production or — this merely expresses the same thing
in legal terms — with the property relations within this framework of
which they have operated hitherto
For pretty much the best account of how the global economic
crisis, the post-2007 unravelling of the debt-driven era of financialised
capitalism that we’ve lived through (and which in Australia has been held in
stasis thanks to a mixture of stimulus and resources export markets in China)
as it applies to Europe, you can do no better than read the three reports by
the SOAS London based Research on Money and Finance group released over the
last couple of years. The third has just come out and they are downloadable here.
To briefly sum up, the problems in the Eurozone are primarily
caused by the way that the construction of a new international reserve currency
to compete with the US dollar has exacerbated inequalities between “core” and
“peripheral” Eurozone nations. This has seen the German ruling class’ cuts to
its workers’ real wages give it a massive competitive advantage over poorer
capitalisms such as Greece, Ireland, Spain and Portugal (and now even Italy).
That process led to Germany effectively becoming the chief creditor to the
increasingly indebted periphery, and when the GFC broke these disparities came
to a head, especially as private debts rapidly became sovereign debt through
massive taxpayer-funded bailouts of the banks and financial system.
Thus, claims that the ordinary people of Greece and other
peripheral countries have been “living beyond their means” are pure elite
ideology, designed to get ordinary people to accept endless austerity in order
to save a monetary project that has always been about shoring up the interests
of European capital and not European workers. The current crisis also exposes
how the most powerful European capitalisms (Germany and France in particular)
have gained the most from the arrangement, leaving the peripheral nations
trapped in an impossible debt spiral. But peripheral ruling elites feel ever
more tied to the Euro the worse things get, fearing that being outside the tent
will leave them more exposed to both their competitiveness problem and the
anger of their own populations. At the same time, the post-2007 crisis now
threatens to disrupt and possibly destroy that hierarchy, as Greece approaches
default and possible Eurozone exit.
The great thing about the RMF reports, and especially the
latest one, is that they are not primarily concerned about the fortunes of
Greek capitalism in such a situation, but how the pressing social questions
created by the crisis can be addressed. And so they should, as a
recent report in the leading international medical journal The Lancet ha shown that the crisis has
been a disaster for the health of ordinary Greeks, concluding, “It reminds us
that, in an effort to finance debts, ordinary people are paying the ultimate
price: losing access to care and preventive services, facing higher risks of
HIV and sexually transmitted diseases, and in the worst cases losing their
lives.” Another
report in the same journal has shown a sharp rise in suicidality.
Costas Lapavitsas and his RMF co-authors argue that default
and exit from the Eurozone is the best option for ordinary Greeks, but for it
to truly address issues of social justice there would have to be immediate nationalisation
of banks and a shift in power from capital to organised labour. They spell out
the beginnings of a serious transitional program: A response to the crisis from
below around which ordinary people can be mobilised.
In the UK things are not quite as dire, but within hours of
arriving we caught part of a 10,000-strong student
protest against Con-Dem
attacks on the education system. This is the first major student
mobilisation of the new academic year and follows the wave of radical protests
and occupations of late 2010. Since then there have also been mass union
protests (including strikes) against the government’s harsh austerity program
and 30 November is set to be the largest national work stoppage since the
General Strike of 1926. It will involve significant strikes by health workers
against cuts and privatisations within the NHS. Occupy London continues at two
sites near the heart of the City of London.
The ideological ferment is considerable. A talk by Canadian
political scientist David McNally — on the topic of his new book, Monsters of the Market: Zombies, Vampires
and Global Capitalism — packed out a lecture room at Kings College
last night. David’s arrival in the UK seems to have coincided with the gathering
of clouds over the Eurozone. As someone once wrote, “It was a dark and stormy
night…”
