(The following article is based on the presentation at the Detroit Workers' Voice Discussion Group meeting of February 26, 2012, with an added postscript on recent developments.)
The latest flashpoint in the world economic crisis is Greece. The Greek government can't pay off its loans from the past without assistance. Should Greece default, this might well result in higher interest rates for other countries with large government debts, such as Italy and Spain, causing a new financial collapse spreading across Europe. For this reason, and not for any love of the Greek people, the EU and the IMF have provided Greece with two bailouts, one in mid-2010 and one presently. Indeed, these have been bailouts of the bankers and the financial system, not of the Greek people, and the terms of the bailout are that Greece submit to severe austerity.
The extent of this austerity is astonishing. It is pushing working people into despair and ruin. The new bailout insists on cuts and yet more cuts in Greek wages, pensions, jobs, and social services. Consider wages. There is to be a cut of 22% in the minimum wage specified by the National General Collective Agreement. There is an even deeper cut that is variously reported as being for workers under 25, or for workers in their first job. There is yet lower pay for apprentices: their pay is to be cut to be cut to 10% lower than the new standard for first jobs. Meanwhile taxes on workers are going up and up, while their pay is being
cut. And social services are being devastated, and yet more workers are being laid off. There are to be cuts in Greek medical services; all substitute teachers in the schools are to be laid off; a total of 150,000 government workers are to be laid off by 2015; and on and on. Here in my hands are two pages of cutbacks: if I read them all it would take a good part of this meeting. They include the notorious "restructuring of the labor market", i.e., eliminating workers' rights and benefits, abolishing sectoral bargaining agreements; limiting the length of collective bargaining agreements to three years; insisting that all present collective contracts expire in one year (no doubt, to allow the new cuts to come into effect rapidly); preventing arbitration unless both parties agree; allowing employers to convert full- time workers to part-time at their own discretion; and on and on.
Greek workers are to be the new serfs, working at the whim of their lords and masters. And as for the unemployed, and those unable to find enough to eat, well, an entire generation of Greek workers is being written off.
These conditions are being imposed by a troika consisting of representatives of the European Central Bank, the IMF, and the European Commission (which is the executive body for the European Union). The troika insists there will be no bailout without these conditions, and the bailout itself consists mostly of providing money to repay loans. Moreover, whatever money does temporarily go to the Greek government will still be under the control of representatives of the troika. Thus the most important changes in the economic life of Greece, this massive impoverishment of the Greek people, are being taken by private negotiations between bankers, administrators, the IMF, and a
Greek government which didn't dare present the agreement to the Greek people for approval, and the foreign bankers are to call the shots.
This is being promoted as a way to bring Greek government finances into order. It's unlikely that anyone really believes that this will happen. The last bailout, that of mid-2010, resulted in depressing the Greek economy further, so that Greek finances ended up in even worse shape. That's the likely outcome of the present bailout as well. But to keep up appearances, the troika projects that if everything goes as they expect -- and so far nothing has -- Greece will gradually pay back its obligations. The real intent seems to be to simply postpone default awhile, in order to buy time to try to isolate other countries from the effect of the coming Greek default.
Now, what's going on in Greece is not just an ordinary business cycle. This is a deep crisis which has still not reached its bottom. It is part of an international depression which is threatening many of the arrangements of market fundamentalism.
We have entered a period of crisis, economic and political. One crisis doesn't ended before another begins. There's the economic crisis; the growing environmental crisis, with hot and cold spells of weather devastating millions of people; the military and political crises, which also affect the economy -- for example, if there are military attacks on Iran it may result in skyrocketing oil prices that further depress the world economy.
And as for the bourgeoisie, it is complacent. It's idea is that, if growth comes back, the depression is over. So in the US the bourgeois economists declared that the "Great Recession" ended in June, 2009. By this standard, the Great Depression of the 1930s ended in 1933 when growth resumed. So what if mass misery continued on and on? And the bourgeoisie's idea is that the environmental issue isn't that important either: if worse comes to worst, they'll send up some rockets to put big parasols around the earth in an attempt to cool it: this is one of the crackpot "geoengineering" ideas that peeked out at the last UN global warming summit in December in Durban, South Africa. As for the Greek financial crisis in Greece, well, the European bourgeoisies think that if they can just keep it penned up in Greece, it's simply a great opportunity to smash living standards.
Thus a few days ago Mario Draghi, president of the European Central Bank, proclaimed the end of the era of social programs in Europe. Reporting on this, the Wall Street Journal wrote:
"European Central Bank President Mario Draghi warned beleaguered euro-zone countries that there is no escape from tough austerity measures and that the Continent's traditional social contract is obsolete
"He said Europe's vaunted social model -- which places a premium on job security and generous safety nets -- is 'already gone,' citing high youth unemployment; in Spain, it tops 50%. He urged overhauls to boost job creation for young people
"He argued instead that continuing economic shocks would force countries into structural changes in labor markets and other aspects of the economy, to return to long-term prosperity" ("Europe's Banker Talks Tough", February 24, 2012, http://online.wsj.com/article/SB10001424052970203960804577241221244896782.html)
Here Mr. Draghi argues, in essence, that mass suffering, even if half the youth are unemployed, doesn't show the necessity for social benefits, but is, rather, a blessed opportunity to remove these benefits. This is the path the EU bourgeoisie has been on for some time, as with the EU labor standard of 2003 that envisioned a labor week of up to 65 hours, with possible exemptions even from that limit. Mr. Draghi wants to use the crisis in force "structural changes in labor markets" wholesale, i.e. eliminate all job security for workers, all restrictions on how capitalists can abuse workers, and so forth. If all this is done, Mr. Draghi is convinced that there will be a return to prosperity, and hey, if not, there's always more cuts to be made.
In this regard, I was surprised a few days ago to see an interview on TV with an EU official who proudly pointed to Latvia as an example of the great things that austerity can bring a country. But a little research showed me that Latvia and Ireland are indeed the new models for European market-fundamentalist economics. So what's happening there?
Well, the Latvian economy tanked in 2008, and in 2009 it dropped more than any other country in the EU. It contracted by 18%, so almost a fifth of the economy vanished. Unemployment reached 20% at the start of 2010, and wages fell and fell and fell, dropping 7 percent in 2009 and 8% in 2010.
After such a spectacular collapse, the Latvian economy hit bottom and grew 5% last year. See, say the EU officials, happy days are here again -- the recession's over. You can supposedly restore growth by cutting and cutting and cutting. True, unemployment is still 16%, but so what? This is the face of the new prosperity.
Now, as a matter of fact, even this miserable 16% unemployment rate was only achieved because a substantial part of Latvian workers moved to other countries: in 2010 alone, 1% of the country migrated to the UK in search of work, and that's not counting migration to Ireland and other countries. And the economy is still 13% below what it was when the crash took place. But hey, wages have fallen, and that's good, as far as the capitalists are concerned. It's what they wanted. What's misery for the common people, is heaven for the capitalists of Latvia and the EU as a whole.
Ireland isn't much better. It is another example where the bourgeoisie crows that growth has resumed, and so austerity worked. But what's happened is that the government is still bankrupt, with a budget deficit of 10% of GDP. Social benefits have been cut. Life has become desperate, and about 40,000 people, somewhat under 1% of the population, fled Ireland last year in search of work. Moreover, no one expects even this "recovery" to last.
But there's another side to the picture. European austerity has been met by mass demonstrations. This is particularly so in Greece, which for the last several years has been the site of continual demonstrations, short strikes, and other actions. This year opened with a new round of demonstrations. And on the day when the bailout was considered in the Greek parliament, hundreds of thousands of people demonstrated in Athens, tens of thousands in Thessaloniki, the second-largest city, and other actions took place elsewhere. Dozens of banks and other buildings burned across Athens.
But many of the governments championing austerity in Europe are supposed "socialist" ones. They talk in the name of the working class, but for decades these have been parties who work with the bourgeoisie and subordinate the working class to what the bourgeoisie wants. Indeed, it was George Papandreou, the President of the "Socialist International", who inaugurated austerity as then-Prime Minister of Greece. The union leaders associated with the social-democratic parties have not wished to see the workers denounce the "socialist" politicians. So the "socialist"-led unions have protested austerity a bit with brief actions to cool off their members, but have avoided going far enough to really put a spoke into the austerity plans of the governments and bankers.
In Greece, the suffering has led to actions that continue month after month. And it was the Panhellenic Socialist Movement (PASOK), after coming to power in 2009, that began the austerity in 2010, and presently has joined with the conservative "New Democracy" party and the far-right Popular Orthodox Rally in a coalition to impose austerity under Prime Minister Lucas Papademos, a former vice-president of the European Central Bank. [See postscript for later developments -- presently there is a second coalition, this time led by the conservatives under Prime Minister Antonis Samaris.] However, PASOK is faced with parties to its left. Some opinion polls show PASOK's support dropping to single-digits, while the groups to their left have reached a total of almost 40% support. All such polls with a grain of salt, but the bourgeoisie is worried that the coming elections may undermine the full implementation of the austerity deal.
However the Greek working class still lacks a clear orientation on what to do, as can be seen by the nature of the groups to the left of PASOK. The largest groups are the Coalition of the Radical Left (Syriza), the Democratic Left (DIMAR, which split towards the right from Syriza in 2010), and the Communist Party of Greece (KKE) -- which is the old Stalinist party. There are also Maoist and other groups, but I don't have too much information about them,
Syriza and Dimar have a large following. And they say they reject the current austerity measures. But they don't put forward the need for major changes needed to break away from neo- liberalism and really present an alternative to austerity, and their plans are largely based on the hope that they could do a better job than PASOK in negotiating a deal with the European and world bankers. Indeed Dimar is even accused by many of serving, in essence, as a left-sounding wing of PASOK.
The KKE uses more radical-sounding rhetoric than Syriza or Dimar. It talks of fighting the monopolies, and getting out of the EU. But it doesn't put forward any concrete idea about what this means other than setting up a government with itself in power, on the lines of the old state-capitalist regimes in the Soviet Union and Eastern Europe. It polemicizes that there is nothing between capitalism and socialism, and concludes from this that it doesn't need any concrete plan other than bringing its state-capitalist model (of course, they don't call it that) into existence.
For them, to fight for carrying out major changes now means to prettify capitalism and reconcile with the bourgeoisie. This sounds radical. But it means that they don't have too much idea about what to demand. What should be done if the financial system does collapse? What should be done if Greece really does get out of the eurozone (i.e. stops using the multilateral EU currency, the euro, and returns to a Greek currency such as the drachma) or out of the EU altogether?
If the working class is to organize itself, it has to defend itself against austerity; it has to have its own program for dealing with the economic and environmental crises and overcoming neo- liberalism. The struggle on these issues will not only prepare the working class to take power, but will have a good deal to do with what a workers' regime will look like when it comes to be. Let's consider, for example, one example of how Lenin dealt with a similar issue.
In 1917, between the February revolution that overthrew the tsar and the October revolution that would bring the Bolsheviks the power, the Provisional Government sought to continue Russian participation in the war, keep the big bourgeoisie and landlords in power, and stabilize the capitalist crisis. This was a period of both economic and political crisis. In one of his articles at that time, "The Impending Catastrophe and How to Combat It", (Collected Works, vol. 25, pp. 319-65) Lenin wrote:
"Unavoidable catastrophe is threatening Russia. The railways are incredibly disorganized and the disorganization is progression. The railways will come to a standstill. The delivery of raw materials and coal to the factories will cease. The delivery of grain will cease. The capitalists are deliberately and unremittingly sabotaging (damaging, stopping, disrupting, hampering) production, hoping that an unparalleled catastrophe will mean the collapse of the republic and democracy, and of the Soviets and proletarian and peasant associations generally, thus facilitating the return to a monarchy and the restoration of the unlimited power of the bourgeoisie and the landowners.
"The danger of a great catastrophe and of famine is imminent. All the newspaper have written about this time and again. ...
"Everybody says this. Everybody admits it. Everybody has decided it is so.
"Yet nothing is being done."
He denounced the bourgeois classes and the government, but he did more than this. He proceeded to show that measures to provide relief for the crisis could be taken. He wrote that "...the ways of combating catastrophe and famine are available, that the measures required to combat them are quite clear, simple, perfectly feasible, and fully within reach of the people's forces, and ... these measures are not being adopted only because, exclusively because, their realization would affect the fabulous profits of a handful of landowners and capitalists." (Emphasis Lenin's)
He referred to the need for regulation of economic life, and for "control", i.e. ensuring that the regulation is implemented. He talked about
1) the "amalgamation of all banks into a single bank, and state control over its operations, or nationalization of the banks";
2) nationalization of the syndicates (or monopolies);
3) abolition of commercial secrecy;
4) compulsory syndication, i.e. amalgamation into an association, of the various branches of economic life; and
5) compulsory organization, or at least encouragement or organization of the population into consumer's societies.
Moreover, he stressed that these steps should be carried out in a revolutionary-democratic way, not a reactionary-bureaucratic one.
He said that these measures would not in themselves be socialism. Indeed, he said that
"nationalization of the banks...would not deprive any 'owner' of a single kopek" and "is being delayed exclusively because of the vile greed of an insignificant handful of rich people. If the nationalization of the banks is so often confused with the confiscation of private property, it is the bourgeois press, which has an interest in deceiving the public, that is to blame for this widespread confusion."
While these measures would not be socialism, he stressed that these measures point toward socialism, and that it is impossible to go forward if one feared an advance toward socialism. But he did not simply say, if we're in power, things will be fine, or socialism will automatically solve everything. Instead, he elaborated the necessary measures to take to avoid perishing from cold and hunger, and he said that they should be done in a way that relied on the activity of the masses of working people, or else the measure would give rise to nothing, or worse than nothing.
He also pointed out that, in the conditions in Russia of that time, these measures would not be implemented unless the Bolsheviks came to power. Various measures to avoid economic collapse had been taken in various capitalist countries, but they wouldn't be taken in Russia; moreover, in the other countries where they had been implemented to this or that extent, the capitalists used war-time regulation and control of the economy to oppress the working masses deeper than ever.
This is a general approach of importance to us today. It's not that we should imitate every measure Lenin listed. There is a century of experience with different measures, and capitalism has somewhat different forms today. We also have to bear in mind that the political situation and the mass consciousness is different today than it was then. At that time, Russia was months away from the Bolshevik revolution; today, we are still in a situation of working class disorganization. Then Russia was faced with imminent working-class revolution; today we are faced with a protracted period of struggle to develop an independent working class movement with revolutionary spirit. But the what is striking is how much of the approach in the "Impending Catastrophe" is relevant to us today.
It's important in the crisis to show what are the measures needed so that the masses can survive the economic crisis that is throwing millions upon millions out into the streets, and the measures needed to deal with the looming climactic crisis which is already bringing flooding and other hardships to millions of people. Even though socialist revolution is still distant, we are entering a period of major economic and political changes. But whether these changes deepen mass misery and remove working-class rights, or bring some relief from the crimes of neo-liberalism, depends on what happens in the class struggle. Mere bailouts of this or that industry, or subsidizing this or that program with a few more dollars, means marking time and preserving the essence of the market-fundamentalist economy. The working class needs its own program for not only fighting market fundamentalism, but for influencing what, to this or that extent, will replace market fundamentalism. There needs to be a fight for
Prior to revolution, the best the workers can achieve is to have these measures implemented in a partial and distorted way, and the capitalists will continually seek to take back whatever is gained, just as now they are taking back the social programs won by the working masses in decades of struggle. Yet the fight for whatever is possible now is crucial, or the working masses will be degraded to mere slaves, the environment will be utterly devastated, and the development of a fighting movement will be put off to the 32nd of January. If this fight is to have any real chance of achieving something, activists should
The main forces to the left of the Greek socialists don't have this
perspective. Nevertheless, it is
crucial that the Greek masses are insisting on continuing the
demonstrations and strikes. They
are not going to starve in quiet. This will help inspire similar
struggles elsewhere in Europe, as
the crisis deepens in one country after another. The mass struggle is
not in vain because there
isn't yet clarity on the goal. On the contrary, as the struggle
deepens, it will encourage major
changes in consciousness, and create the soil for the development of
new class-conscious trends.
All this won't take place overnight. But the bourgeoisie is far too
complacent, not only over
where the economic crisis is going, but over how long it will be able
to subjugate the working
class to its market-fundamentalist perspective.
Since the above was written in late February, the Greek economic situation continues to grow more desperate, as the ruling European bourgeoisie insists that the deal negotiated with the troika be institute in full force. It doesn't matter how much the intervening months have verified yet again that austerity is an economic disaster in Greece, in Britain, in France, in Spain, and elsewhere in Europe. It doesn't matter that forcing Greece into bankruptcy may well be the trigger that brings down other European countries, one after another. The bourgeoisie sees its golden opportunity to enforce market fundamentalism in full force, cut social spending, eliminate worker protections, and privatize, privatize, privatize, and it's not going to be diverted.
The immediate issue is that the Greek government is about to go bankrupt unless the next round of bailout funds from the Eurobankers is actually delivered, and the EU won't grant that unless the Greek government shows that it is willing to rape the Greek people with full zeal and enthusiasm. An immediate showdown on this issue had been delayed for a number of months by political instability in Greece, but the time for decision is nearing.
There have been two general elections in Greece this year, leaving the country in the hands of a second austerity coalition (the first austerity coalition being the one mentioned above under then-Prime Minister Papademos), this time led by the conservative New Democracy party, and supported by PASOK and DIMAR. The hatred for austerity has been demonstrated in the elections by the growth of votes for anti-austerity parties of various political complexions. But in the Greek multi-party system, the party with most votes gets an extra 50 seats in parliament (out of 300 total). So, with a pro-austerity party still getting more votes than any other party, even if far less than previously, the pro-austerity parties have squeaked by with enough seats to form a ruling coalition based on support from slightly less than half the voters. Of course, to get that support, the biggest vote-getter among the pro-austerity parties, which is now New Democracy, promised hand-on-heart in the elections that it could shield Greece from the worst consequences of austerity, if only the people agreed to austerity and privatization in general. But the European bourgeoisie won't hear of it.
The details of the two elections are as follows: the agreement to form the first austerity coalition of "socialist" PASOK and conservative New Democracy specified that new elections should be held early -- and so there were general elections on May 6, 2012. This election reflected a groundswell of popular hatred for austerity. PASOK, the "socialists" for austerity, were devastated, with the party obtaining only somewhat more than one-quarter of the votes it had gotten in the last general elections, those of 2009. The conservative New Democracy was also hit hard, getting only somewhat over one-half the votes it had gotten in 2009, but doing somewhat better than PASOK. And, although New Democracy obtained less than one-fifth of the votes cast, it ended up as the party with most votes. Meanwhile the anti-austerity Syriza tripled its vote from 2009, and became the second largest party in parliament. New Democracy obtained only about 12% more votes than Syriza, but had over twice the seats in parliament because of the 50-seat bonus. But even so, New Democracy needed to form a coalition in order to have a majority, and it was was unable to do so.
So a caretaker government was formed in order to mark time until the next general election, this time on June 17, 2012. It was again fought sharply over austerity, with New Democracy saying that to reject austerity would mean that Greece would be forced to leave the Eurozone and reestablish its own currency, the drachma. To win votes, New Democracy pretended that it could accept austerity and yet soften it, protect many jobs, and get two additional years to meet various fiscal targets. Syriza said it would tear up the austerity deal altogether, but claimed it could negotiate a better deal with the European bourgeoisie, and that this would not require leaving the Eurozone.
The result of the June elections was that PASOK continued its decline, losing yet more votes. Both New Democracy and Syriza increased their votes substantially, with New Democracy retaining a modest lead over Syriza. New Democracy would have had only 6 seats more than Syriza, but the 50-seat bonus allowed the formation of a second austerity coalition, with New Democracy's Antonis Samaris as Prime Minister, and PASOK and DIMAR joining in this coalition of shame. These three parties represented about 48% of the votes cast.
While New Democracy was busy insisting that the European bourgeoisie would be reasonable and soften the bailout terms, the the troika has been busy insisting on deeper and deeper cuts. A few days ago a secret letter from the troika found its way into the press. It showed that the troika was demanding that the six-day work week be introduced, the hours of rest per day be lessened, the minimum wage be cut further than proposed earlier, employers' contribution to social funds be cut, and on and on. ("Eurozone demands six-day week for Greece", the Guardian, September 4, 2012, http://www.guardian.co.uk/business/2012/sep/04/eurozone-six-day-week-greece)
Meanwhile strikes in the most varied sectors and demonstrations have continued throughout this period. Not a day goes by without some protest in Greece. Greece may be the spark that sets Europe aflame. <>
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