A scared left turn

The political crisis in Britain (coalition governments, referendums on Scottish independence and on the EU, the decline of the Westminster parties etc) has had a direct effect on the Labour Party. Delighted by the initial rise of UKIP, full of talk about how the Social Democrats' spilt from Labour in the 1980s had 'divided the left' and now how the rise of UKIP would do the same for the right, Labour's leaders suddenly find themselves in a desperate position. And they are taking desperate measures.

The Blairites have been counselling doom for Ed Miliband's Labour Party for months. They argue that Miliband's failure to 'steer to the centre' and to 'win' the votes of 'Essex man' is to fail to learn the lessons of Blaire's success fifteen years ago. They moan and groan about comrade Ed's lack of admiration for business. They worry that the wrong Miliband is now steering the Labour ship onto the port side rocks.

In fact they need not worry. Ed Miliband had his troops march into the coalition lobby when Chancellor Osborne demanded a vote on £30 billion worth of cuts in the the first 3 years of the next parliament. Ed is no Alexis Tsipras. However, it is true that Miliband and his team have been making a lot of noise in the last two weeks about Tory tax dodgers, about a new tax on Bankers' bonuses, about new laws against financial fiddles and about the Living Wage. Is Ed having an epiphany?

Sadly no. But the not so red Ed has 'seen the light' on one important matter. He has awakened to the terrible realisation that the Labour Party could be finished as a party of government. If the SNP takes away Labour's base in Scotland then for the foreseeable future Labour will never again have a majority in Parliament. Ed knew this would happen if there was Scottish independence. But now he realises that it could happen anyway, via the emergence of a mass party, with an anti-austerity message, in its traditional Scottish heartlands.

So when Ed speaks these days, he is speaking to the Scots, or, more specifically, to Scottish ex Labour voters. He is in a race to the death with a party, the SNP, that has just announced that it is in favour of the end of austerity and who did not vote for the £30 billion cuts to be applied in the next Westminster parliament.

Leaving aside the character and motives of the SNP leadership, they have created a mass base for themselves in the Scottish working class, and are reinforcing it with an anti austerity policy and the idea that in a coalition with Labour, they would force the concessions in an anti austerity direction. But for Miliband and his 'strategic thinkers', that would open up an even more terrible vista.

The Labour Party is not what it was. It is no longer rooted in an organised social-class, base. Active union members and not just in the RMT, are arguing for the union 'political funds' to be spent on anti austerity candidates and parties - like the Greens. The Labour leadership has not only unhinged itself from what remains of the trade union movement by consistently supporting the worst anti-union laws in Europe, it has deliberately turned its back on working class people and their futures as its main enterprise. Perhaps surprisingly to Ed and his ilk, what this means is that there is no longer the strength  of purpose, the history, the imagination and the will, to see out a period of retreat and defence. There are no longer the people who understand the imperative sometimes to carry that load. Instead the Labour Party, like the other main parties, is dominated by careerists, chancers, by the modern political class, with all the specious corruption that carries. So, they will not hang around Ed. If Labour cannot take office, then the modern lynch pin of the modern Labour Party has been pulled out.

That is what really gives Ed his sleepless nights. Whether he will preside over the drawn out disassembling of Labour. That could be the next drama in Britain's political crisis

Left politics in Britain

It is worth for a moment turning our gaze away from the major class struggle in the world, the colossal US military action to win back hegemony in the Middle East (after a decade of defeats in Iraq and Afghanistan) — now aided and abetted by the reactionary and murderous utopians of IS. And even to look aside from mainland Europe - from the Ukraine, or from a room in Brussels where a concentration of contradictory and massive class forces on the move across the continent are to be found; as Syriza negotiates with the enemy over austerity and for Greek survival. The political crisis in Britain (the very lively ghost of Scottish independence, the coming EU vote, the ten year prospect of no single party government, etc) has, up to now been a minor aspect of the European scene; pre-eminently a crisis of rule. It is a crisis of the British ruling class which has largely been kept to themselves, but now it has taken a new turn.

Britain has held a marginal position up to now in the various European class conflicts. Part of the reason for the UK's spectator role has been that the serious political crisis emanating from the turmoils of our rulers have long been mirrored by the ragged politics of those set up to oppose them (with some honourable exceptions). The left in Britain has generally been as chaotic and unfit for the new realities in the post 2008 world as their opposite numbers. Now a new 'position' speech by the leader of the SNP on austerity in Britain marks a potential point of recomposition of the left. The new SNP initiative, to attack the main Westminster parties for their collective support for continued austerity, serves to clarify left politics in the next period in Britain and opens a new opportunity.

First to be clear. The SNP still insists that 'we' still pay the debt. But it also insists that austerity has 'failed', it rehearses Keynes's dictum that the economy should be designed to give the maximum number of people in society a good life and it proposes an estimated additional £180 billion government growth package over 5 years to stimulate the economy and increase tax revenues. In that, the SNP is simply echoing louder and louder voices across the capitalist world, particularly those of the US government. They also aim to embarrass Labour as a pro-austerity party and outflank it in their Scottish seats in the coming election.

For its own reasons the SNP have made its anti-austerity (not austerity light) policy a deal breaker if Labour needs to form a coalition. In doing this, at a stroke, Nicholas Sturgeon has clarified the main line of divide in the coming General Election. Undoubtedly the gathering pressure of Syriza in Greece and Podemus in Spain are part of the story, even in Britain — but the SNP appeal has an unmediated, direct impact on millions - obviously most especially in Scotland (but also in England.)

Does this translate into (re)organisational regroupment? The Labour Party's troubles lie deep in its decades long movement away from its class base. Faced with the decline of the trade unions, the recomposition of the working class, the reorganisation of the very contract between capital and labour, it sought state employees (at all levels) the self employed and small business as its alternative voting mass. It broke away from class identification, as its project and purpose became proposing new alliances around high tech, new culture, 'aspirant' workers and 'citizens' of cities. This melange regularly fell to pieces. Sections of the now fragile union leaderships were then brought back as repositories of wealth if not votes, but Labour's signal lack of any positive direction meant that it was, and remains, in serious decline and vulnerable to any credible alternative that does seem rooted in real life. In Southern England that looks like UKIP, in Scotland it is the SNP. Some Labour MPs may denounce austerity. But the Labour leadership can no more separate itself from its commitments in this area than it can reorganise its alienating and alienated leadership. A shadow Chancellor who protected the super rich; a shadow Health Minister who supports PFI and who sold the first hospital to a private company; a shadow PM who presents himself as an incompetent Oxbridge/Westminster machine man; the Labour Party cannot and will not lead a regroupment of all who oppose austerity. The best that can be hoped for is that bits of it will have the opportunity to break away in cases where a credible lead against austerity has emerged.

And what is emerging? A potential anti-austerity political coalition is beginning to emerge. While millions will still have to waste their vote on Labour, especially in Northern England, a million in Scotland might vote SNP and against austerity, the Greens could win up to 4,000,000 votes, small left groups and parties could poll another 50,000 and various individual candidates (for example Louise Irvine, chair of the successful Lewisham hospital campaign who is standing against Hunt) could achieve another 200,000 votes.

As the new government to be stumbles into the light of day on May 8, it will still face a political crisis completely undiminuished from that of its predecessors. It continues not to represent the real experiences of real life for the overwhelming majority of the population. Perhaps there will be a sufficient force of Scottish MPs strong enough to force a larger but weaker Labour Party into some anti-austerity concessions. Hopefully there will be a batch of much stronger anti-austerity voices, to support Green MP Caroline Lucas, and form a small group.

And outside? In the territory where Syriza and Podemus grew into life? In England we might envisage the beginnings of a new political umbrella, perhaps based around the strongest organised force, provided by the Greens, designed both to unite those who fight austerity day to day with all those who increasingly see the need for an anti-austerity political voice in Parliament in a small parliamentary group and, in due course, in an anti-austerity government.

Options for Greece

As the hours tick by, so the decline of share prices on the Greek stock exchange and the draining of deposits from Greek banks increases. There is absolutely no immediate reason for this other than the deliberate, and precipitate decision of the ECB to remove Greece from all the other Eurozone nations who are allowed to use debts as a collateral against ECB loans. The Governor of the Bank of Greece Yannis Stournaras (who is not replaced in the normal change of posts in the bank after a Greek election) had reassured that bank liquidity was fully ensured and that the bank deposits were fully secured (6 February.) Nevertheless the ECB has made a calculated political move, led by the German regime, to smash the democratic decision of the Greeks as quickly as possible. Chancellor Merkel wants to close down the anti-austerity movement in Europe now. At the moment they believe that any delay, any sign of any Syriza's success, will simply increase the number of voices across all of Europe now rising against their past they have been forced to endure. We are witnessing a test in history: whether the scope of German economic power includes the capacity to make a rapid regime change - in another modern, western European country.

But Syriza has opened out a deep split among the world's economic leaders. Virtually all economic experts outside Germany (minus the second rate, public school idiots in the British Treasury) agree that Greece's policy towards debt relief is eminently sensible. The US political leadership has echoed that view. Every move by Syriza so far has had the effect of politically isolating Germany and the discredited captains of the Troika (the European Central Bank, the IMF and the European Commission.) Of course they remain immensely powerful. But they are increasingly losing their status as the leadership of the continent both in the wider world and certainly among the toilers of Europe. 

And now Syriza has begun its internal Greek reform programme. They aim to dismantle the cartels and self serving oligarchies and most importantly, to implement a radical and progressive tax system - accompanied by a register of external assets of Greek citizens, with no exemptions or exclusions and with a policy of forfeiture of property where there is no payment. (An estimated 10 billion euros are currently owed in tax.) The demand of the Troika for internal reform in Greece is being addressed as never before (and as the Troika never believed would happen.) So the Greek government's democratic legitimacy, having already been established, is supplemented by a political credibility now on a rapid rise across all that part of Europe that does not belong to the banks and the European Commission's largely discredited politicians. 

Greenspan, the ex chair of the US 'Fed' and the genius who gave us 2008, predicts an early exit by Greece from the Euro. Despite Greenspan's dodgy credentials, his thought must also be in the minds of Merkel and her associates. Syriza leaders implacably repeat their intentions to remain in the Eurozone. Politics will obviously determine the outcome of this particular 'economic' argument. (There are a thousand and one ways to set up a solution that would look like the debts are continuing without them effecting anything in Greek life.) On the 11th and the 15th of February major mobilisations will take place defending the anti-austerity proposals of Syriza across Greece and the rest of Europe. But it is perhaps useful to spell out some of the direct economic options in this ongoing struggle.  

As we have seen there are a growing number of mainstream economists and politicians across the world that are in favour of annulling all or part of Greek's debt. This would be the most favourable option, but unlikely as a position of the Eurozone leadership at least in the short term. Sensibly the Syriza leadership has placed their main focus on the priority for the Greek people; the end of political corruption and the end of life-sapping austerity. In this context, the point of the discussion about the debt is to get to a place where the debt can no longer effect the day to day life of ordinary Greeks now or for the foreseeable future; where the debt cannot hold up either the drive against austerity or for growth. Accordingly, a fifty or even thirty year suspension of all debt payments or payments of interest on the debt, would have the desired result. Inflation would eat away at the debt itself. Fifty or even thirty years will change the character of prevailing politics and economics etc., etc. This would have virtually the same effect as cancelling the debt. It was first tried (successfully) by the British when they simply stopped paying their WW1 debts to the USA in 1934 without ever denying that the debt continued to exist and without ever paying a bean.

Syriza have already put forward an idea for debt repayment via bonds which would be tied to a period where Greece had sustained growth in its economy (when very low interest repayments would have little effect on real economic life) or where the bonds (for the debt) would be repayable at some future to be decided. Both of these suggestions have the same effect; of pushing the debt and any interest or debt repayment outside of the real day to day Greek economy - and allow for its capacity to grow. A new 'bridging' plan is to be presented to European ministers which rewrites the Troika's economic conditions, allows some of Syriza's promises to go ahead and creates the time and space to rally the peoples' Europe against any further austerity. 

Time is now the main goal in the struggle of Greece against the Troika. The politics and economics are going Syriza's way. But they need to survive the initial German led onslaught. They need time to allow Podemus and others in Southern Europe to grow into the leadership of their own countries and societies. They need a peoples' clamour for a debt conference. They need enough immediate financial stability to deliver real reforms to the Greek people.

And would a Greek exit from the Euro be a disaster? For the Euro zone quite possibly. In December 2001 Argentina exited its currency tie-in with the dollar. Argentina accounts for 0.9% of the world's GDP, Greece for 0.4%. Before the Argentinian currency left its link with the US dollar some 24% of its population were unemployed, 50% of its youth. The economy as a whole had shrunk by 20%. A huge social upheaval challenged the status quo. Argentina stepped away from the dollar, repudiated all of its debts and despite a government that desperately hung on the what it could of the old corruption, the existing status quo and the supreme rights of the rich, (which meant that it was the ordinary people who, on the whole, bore the effects of the the currency devaluation and loss of savings and purchasing power etc,) the country's growth skyrocketed to 8% a year over a decade. Argentina had no line to possible Chinese investment. It had no allies (because of its government) in the rest of Latin America.  In Greece we might do more than hazard a guess about the direction that a Syriza government might take to defend the living standards of its people in such circumstances. 

Debt bombing Greece, part 2

At 8.30 pm on February 4, the European Central Bank decided to block funding for Greece despite the previously agreed basis (across all other EU countries) that accepted that outstanding loans could be used as collateral for the ECB's money. It is hard not to see Merkel's intervention here as the Bank chief talked things over with his boss, after meeting with Syriza's Finance Minister earlier that day. Merkel and Mario Draghi then provoked the bank run in Greece on 5 February that they had decided was needed to educate the Greeks that their democratic decisions were subject to European ruling class veto. Billions more Euros were exported out of the country. The ten-day-old Syriza government faced their first Troika initiated emergency.

Greece then is still an experiment. Up to now, this experiment seemed more a matter of Greek politician's rhetoric and hyperbole - that is to most of the media in Western Europe, outside Greece. But Greek people always understood the idea. The Greeks understood why it is that they still 'owe' £340 billion, more than they 'owed' in 2008, even after a £40 billion debt reduction in 2012, and after 6 years of drastic, life-threatening austerity. They lived the 'austerity' and still have the debt; except it has gotten bigger. The Greeks understand that their lives and resources have been stolen from them.

The capitalist world's increasing debt has been discussed before, including by this blog. Now McKinsey Global Institute have been analysing world debt for a decade and have produced a new report. Their latest study shows that, despite austerity policies in the west - presented as the solution to the indebtedness, which nearly blew the world apart in 2008, world debt has increased by $57 trillion since. It now stands at 286% of the world's GDP. China makes a significant contribution to this with an increase from $7 trillion of debt in 2007 to $28 trillion now - 282% of its GDP (see 'China fever ... ' blog 6/11/2014.) All of the major western countries, including the UK, have also increased their indebtedness since 2008. So whatever else is true, this colossal trend in modern capitalism, with debt now at its highest levels for 200 years, including during periods of world wars, cannot be reversed, or even substantially effected, by 'austerity.'

Interestingly among McKinsey's answers to the debt problem are the proposals that inflation is encouraged so as to reduce the value of the world's debt. (This is a call for flooring the gas pedal for growth!) Debt 'restructuring' is called for. (That is annulling what debt you can get rid of.) McKinsey also calls for higher wealth taxes. And it is at this point that they get closest to the heart of the problem and its real solution. How has the capitalist system built its astronomical debt?

The debt is a product of a global capital strike that started in the late 1970s. Since that point big capitalist companies across the globe stopped serious investing and stopped paying part or all of their taxes. And that process sped up after the collapse of the USSR and sped up again when the brakes were taken off financial institutions and the trade in money itself became the world's biggest economic activity. Instead of investing (and despite a real exaggeration, this one built up around the new 'digital revolution' - a source of investment that was miniscule in comparison to the creation of the world's railways and air travel, health systems and universal education) companies instead paid out to their shareholders. Instead of receiving taxes from the companies and the wealthy, it was governments, in cahoots with financial institutions, that were used and continue to be used to 'keep up' the costs of the welfare states that had been won by the working classes in the west. (It is worth comparing the tax income from companies and the wealthy gathered by the 1945 / 48 Labour government with governments today.) Indeed western governments accounted for $25 trillion of the increase of $57 trillion of debt since 2008 - despite their almost universal austerity policies.

That is why we have got the most wealthy ruling class in today's world since any sort of figures were ever collected. That is the true achievement of modern capitalism. The Greeks are right. Austerity cannot deal with the economic problem they face. They will never pay down their debt. What has happened is that their money and their resources have been stolen from them. And now a new experiment in the west is underway. The new experiment that Merkel and others want to try out in Greece (and Osborne in Britain etc) is the withdrawal of government from any substantial aspect of care - in favour of philanthropy and 'citizen based' commissioning. Trying to escape from its historical debts to the working class, forced on them by the huge working class struggles of the 20th century, our new ruling class seeks a new-model, lean and mean state, with as little power over economics as possible. Then the debt can play its real role to the full. It can then be the sword of Damocles permanently hanging over the majority who seek to defend the social rights that previous generations have won.

Next: what are the Greek peoples' options?

A new stage in European politics.

Now that the anti austerity fight across Europe has a government in Greece to lead it, European politics will never be the same. The current leadership of the EU has to either destroy the Greek government or be signally defeated - with deep consequences either way in their own countries. This is not a prediction about time-scale, although the possibility of Podemus taking Spain by the end of 2015 will accelerate the engagement on both sides. However Europe and the EU cannot remain the same as before in either case.

Merkel and her pals and minions are in a difficult position. Their policy has not delivered significant growth for the euro zone in seven years and shows no real prospects of doing so in the future. Meanwhile the euro relentlessly buoys up the returns on German exports across Europe. If, at the end of February when the next payments to Greece are due, they are refused because the Greek government will not follow the prescribed cuts programme of the Troika, then Merkel faces the possibility of the exit of Greece from the EU - and the repudiation of all of their debts by the Greeks. Major concessions would then be necessary in the case of Spain and Italy to prevent others taking the same route with a view to dissolving their own debt mountains. On the other hand, any compromise offered to Syriza (for example, repayment of debt interest only when Greece GDP is restored to its 2008 level and growth is above 3%,) would also be demanded by Ireland, Portugal, Spain and Italy - at least.

At the same time an anti-austerity government in Greece and the prospects of another in Spain will produce a new wave of anti-austerity action, building across the continent, in reaction to the anger created by years of falling living standards, rising inequality, political corruption and the lack of hope for anything different in the future. The new Greek government has already shocked Europe's rulers. The debate on the margins about 'dropping' austerity in Europe and cancelling some of the never repayable debts, has moved to the centre. (See the latest proposals offered by the Economist.) Syriza has opened a potential split in Merkel's ramparts. A great groundswell of support for Syriza across Europe can open that split into a chasm. However, should there be no European debt conference and no acceptance of Greek sovereignty over their own economy; should the Greek government be defeated by Europe's rulers then the anger of the European people will not go away. Their hope will be replaced by despair for the future and the contempt for current politics and politicians will only ratchet up. And it will be the chauvinists, and the nationalists and the racists and fascists who will politically reap that harvest, right across the continent.                                                                                          

That's why, whatever else happens in the next weeks and months, Merkel and her allies will do their very best to undermine the new anti-austerity movement and its government, at its source, in Greece itself, so that the European rulers' dilemma might be 'solved' by the overthrow of the Greek peoples' democratic wishes, quite possibly with the additional collateral of a bloodbath.

The stakes could not be higher. In the centre of the political triangle that has been created between Syriza, the exciting and short term prospects in Spain for a second anti-austerity government, and Merkel, are the ordinary people of Greece, of Spain, of Europe. Greece is the crucible today of Europe's future tomorrow. But we all have a say in that.

Greece and our battle against austerity

Thursday, 29 January 2015

Greece and our battle against austerity

On the evening of the 28th of January hundreds rallied to the Greek Solidarity Campaign meeting to support Syriza's victory at the TUC in London.

Two speakers from Syriza, one from the national leadership, made many points of interest. These included spelling out the first acts of the new government. The Greek people now have something to defend! 

The speakers were also adamant about the future. Of course Syriza is facing a momentous battle. Of course much will turn on whether Podemus in Spain maintains its lead in the polls and is able to open up a second front (as a result of the Spanish elections on or before Sunday 20 December this year.) But we should realise that, like the struggle against Apartheid in South Africa, or the Vietnamese war of liberation against the US in the 1960s and 70s, the people, particularly the people of Europe, must rise to the defence of Greece in its challenge to western and specifically European austerity. 

Both Syriza speakers elaborated on the purpose of such an international solidarity movement. Its potential role as both a support for Syriza and the Greek people, but also its role in creating pressure on Syriza itself, alongside the mobilisations in Greece, to confirm and buttress the will of the new politics and the new politicians, to go forward -  and to go on to the end. This is the complete opposite to the traditional Labourite, social democratic perspective. When Obama won the presidency he demobilised the marches and the rallies (and had his own healthcare legislation cut to pieces by a hostile Congress as a result.) If the British Labour Party wins an election that is the end of the role of its supporters at the base. The dialectic of the struggle against austerity however reverses these shibboleths. Politics, action in the communities, isolation and even physical control of countervailing forces like the police and military and the oligarchs that use them, begins with the assertion, in action, by the people, of their indispensible place in the unfolding political drama.

The momentum of mass political action is the only route afforded by our withered western democracies to allow democratic change on the key questions of wealth and power. Our parliaments and mass parties have not, for a couple of generations, been able or willing to challenge society on these terrains. Our political leaders have become apologists for the 'here and now', for the increasingly narrowing boundaries available to democracy, for the 'realism' of decline and defeat. 

Syriza threatens to break the mould; to bring down the political class with its self serving and crushed imagination. It is inconceivable that it will succeed without the democratic movement in the communities and on the streets of Europe - and wider.