Thursday, 27 August 2015

Top Fucking Work, Britain

The Department for Work and Pensions defends itself from findings that an average of eighty people a month die after being declared fit for work or being placed in a preparing for work group:

“Any causal effect between benefits and mortality cannot be assumed from these statistics. Additionally, these isolated figures provide limited scope for analysis and nothing can be gained from this publication that would allow the reader to form any judgment as to the effects or impacts of the work capability assessment.”

It added: “DWP does not hold information on the reason for death, therefore no causal effect between the WCA decision and the number of people who died within a year of that decision should be assumed from these figures.”

These statistics have only been released as a result of freedom of information requests. Of course, they are not systematic because they are released by the DWP under duress rather than by an independent group that has properly researched the figures. 

The DWP's statement is quite right then: we cannot assume any causal link between the deaths and the ending of people's claims. This is not because the data is inconclusive but because it is incomplete. Indeed, if there are concerns (which there have been for years, this data release being the culmination of them) that people are being declared fit for work when they are clearly not, surely it is in the best interests of the DWP to clear those concerns up. It is truly astonishing that their statement strikes such a defensive tone. The natural response should be, "we - or somebody independent - will now complete the research and establish the causes."

The DWP fought for months to avoid the release of these numbers. It has ignored steadily accumulating requests for an overhaul of its assessment system by the likes of the British Psychological Society. It has ignored expressions of concern from charities and from within its own ranks that the perverse incentive to cut welfare expenditure was creating greater homelessness and causing unnecessary suffering.

The dismal result of our current obsession with "welfare scroungers" is quiet desperation accompanied sometimes by death while an evasive Ian Duncan Smith wins media plaudits. Well done, Britain. Top fucking work again.





Monday, 24 August 2015

Time for the Labour Realists to Get Real

Another day, another warning about the impending apocalypse. If only Labour were half as worried about climate change as it is about Jeremy Corbyn.

To judge from the press reaction you'd think a Hell Mouth  had been left unlocked somewhere in deepest Islington. Out of said demon hatch a puckish cohort is supposedly lurching - all bearded; most bereted; of wild and red-starry eyes. Behold, the demonic Left! It slouches toward your house prices, your budget flights, and your artisan cheeses! It brings inflation, immigrants, and a collectivist uniform of flat caps and donkey jackets.

Jeremy Corbyn's followers have inspired a whole new apocalyptic language among their rivals. The urge to string clunky metaphors together into the rough form of a Times opinion piece seems quite irresistible to them. Labour is all at once being rugby tackled through the looking glass; flogging a dead horse that's gamely sprinting towards a political precipice; and deluged by such totally uncharted waters that the outcome is a strangely guaranteed destruction.

The avid mixing of metaphors by - lest we forget - such handsomely paid political communicators suggests the babbling of feverish imaginations. The clammy paranoia of the Victorian consumptive, half-mad and half-lucid.

The whole "centre left" - as it still likes to be known - has been seized from its usual studied blandness and led Shelley-like "with great force to walk in visions of," well, Corbyn. No doubt if they meet murder on the road, he'll have the face of Owen Jones. Or trailing in death's folded cloak they'll find that awful Brand bloke. Next comes the Dreaded
Jeremy - he wants to nationalise our Queen, allegedly!

But what any real Trot will tell you is, like red squirrels, public loos, and Jeremy Clarkson's career, they are a phenomenon in decline. The whole entryist furore is a fantasy born of those feverish columnists, scribblers who, till now, have never troubled themselves with the views of real-life Labour members. Bur there are no ecstatic visions at Corbyn rallies. In fact, these supporters are really quite clear-eyed. They have come to a basic political conclusion: when the electorate has a half-decent Conservative Party to vote for, it has no  need of a right-wing or centrist Labour. 

Labour won in 1997, 2001, and 2005 not because everyone loved Tony (God, they hated him by the end!) but because the Tories resembled a tipsy, slightly racist and very sexist uncle at a wedding for about a decade. Then they sobered up - a bit  - and became eminently electable again.

Since 2005 the Conservative Party has been firing on all cylinders. 2010 and 2015 were grim reminders of what Labour's soft left has always counselled its more insurgent centrist bedfellows: Essex woman and man, never mind the Shirearchy, have absolutely no need of a right-wing Labour Party when the Tories are on fine form. 

And most fine their form presently is: without ever pulling out of the 35% range, they operate a crafty electoral hegemony that cashes in on low voter turnout. It takes guile, smarts and unrepentant exploitation of the electoral system to build such success. The contemporary Tory party is excellent not only at appealing to its core vote but removing any need to win the active support of those beyond its traditional fiefdoms. In such an environment of dejection and disillusionment (around 40% of voters do not vote; many more do not even register), the Tories win almost by default.

The popular view on the centre left is that Labour is just a triangulation away from winning hordes of Surrey and Buckinghamshire voters away from the Tories. Just embrace aspiration and as quick as you can say "There's a lovely new cupcake cafe in Farnham," Labour will be safely ensconced in government. Corbynites know it won't work - not when the Tories aren't already ripping themselves to shreds. 

Labour - in fact scratch that, every left and leftish force in Britain - needs to focus all its energy on rebuilding the electorate. This is good for democracy and what's really good for democracy - like people actually voting in high numbers - is generally bad for Tories. The real unelectables are those who want the eternal return of the same 1997-2005 coalition. They're fixated not only on those years of beaming, Colgate-white grins, but also on the need to destroy any departure from that way of doing politics.

It turns out that, behind the centre left's realist pretensions, lurks a dread of hard-left folk devils. The quicker they set aside these fantasies about Trotskyist plotters and start dealing with the membership as it actually is, the more chance they have to ensure their own survival. In short, time for the realists to get real and grow up.

Wednesday, 19 August 2015

Mitterand and the End of Left Reformism

Spy any lessons for the contemporary left in this excellent article at Jacobin about the failure of Francois Mitterand's radical Keynesian programme between 1980 and 1983?


"But either way, the French case illustrates an important point for socialists to remember: the political power of the capitalist class flows not just from what capital can do, but from what it can choose not to do — invest. It is its control over the investment function, not its collective organizations, that is the key source of capitalists’ power in the political sphere: since, in a capitalist economy, investment is the prerequisite for growth, employment, and tax revenue, policymakers will always have an incentive to prioritize the demands of business confidence over all other considerations.
The only alternative is to attempt to seize control over investment. This was not an approach that Mitterrand was, in the end, willing to entertain."
(By Jonah Birch, contributing editor of Jacobin, available here: https://www.jacobinmag.com/2015/08/francois-mitterrand-socialist-party-common-program-communist-pcf-1981-elections-austerity/)
The article makes it quite clear that the political contest between left forces in the capitalist state and capitalist finance in the markets is fought via the mechanisms of investment, all of which capital presently holds in its own hands.
The key questions of a left government that does not want to be defeated by capital are 1) how to wrest control over investment from capitalists, thus controlling currency speculation and restricting capital flight and 2) how to embark on a growth and productivity plan without being thwarted by inflation as consumption heats up? 
History has of course seen governments triumph over business when it comes to increasing the social wage, protecting jobs and coercing capital into job creation. The Postwar era in Europe saw the creation of such regimes of "social compromise." However, there is a clear time limit to such Keynesian reform policies. Once the economy is operating at full speed, with employment at its limits and consumption rising, inflation will take off. This weakens the currency and curtails investment as profits are threatened or as capital moves. Moreover, as James Galbraith has observed, the foundations of the Keynesian full employment system have been more or less abolished. Nevertheless there remains some stimulus to private investment (such as QE and lowering inflation rates) followed by the much discussed withdrawal of these props even in contemporary capitalism. This cycle resembles what Michal Kalecki called the "political business cycle": 
"This state of affairs is perhaps symptomatic of the future economic regime of capitalist democracies.  In the slump, either under the pressure of the masses, or even without it, public investment financed by borrowing will be undertaken to prevent large-scale unemployment.  But if attempts are made to apply this method in order to maintain the high level of employment reached in the subsequent boom, strong opposition by business leaders is likely to be encountered.  As has already been argued, lasting full employment is not at all to their liking.  The workers would 'get out of hand' and the 'captains of industry' would be anxious to 'teach them a lesson.  Moreover, the price increase in the upswing is to the disadvantage of small and big rentiers, and makes them 'boom-tired.'
In this situation a powerful alliance is likely to be formed between big business and rentier interests, and they would probably find more than one economist to declare that the situation was manifestly unsound.  The pressure of all these forces, and in particular of big business -- as a rule influential in government departments -- would most probably induce the government to return to the orthodox policy of cutting down the budget deficit.  A slump would follow in which government spending policy would again come into its own." 

A reminder from the Postwar era that the objection to full employment policies or policies which seek to increase the living standards of the masses are not objected to on pure, rational, timeless economic grounds but on the grounds of a class logic. When combatting that class logic, however, it will do to remember that it operates levers of material power. That which it does not like intruding in its affairs, capital can swat aside. The only way to win is to break the rules of the capitalist game. 


Saturday, 15 August 2015

Can Corbynomics Work?

"People's Quantitative Easing" may sound like a form of stern Maoist muscle therapy, but according to its many critics this economic proposal of the Corbyn campaign is extremely dangerous. At least this is an attack on actual policy, rather than Corbyn's beard or his supposedly deep affection for Hamas. However, is the policy, as Labour rivals allege, "economically illiterate?"

The chances are that it is not. The notion of a People's QE has also been floated by respectable Keynesians like Mark Blyth, Eric Lonergan and Simon Wren-Lewis at the Guardian. They had different ideas about how it would work, but it still would involve printing money for investment. The tax campaigner who advised Corbyn to include People's QE in his campaign document, Britain 2020, is Richard Murphy, who has done a respectable job of defending it around the media.

Two attacks on the policy are particularly stinging as they come not from the monetarist fringes of the Tory party, but from perceived Labour moderates with strong economic credentials. Both fellow leadership candidate Yvette Cooper and her supporter and current Shadow Chancellor Chris Leslie have alleged "massive inflation" would result from the policy. They don't deign to explain why or how, and the media largely doesn't ask them. In a classic case of what Simon Wren-Lewis calls "media-macro", the questionable economic wisdom of officials is reported verbatim, without analysis or an alternative view.

What is People's QE? And why would it be so disastrous for inflation when normal QE was not? First, we need to summarise in very vulgar terms what QE is.

Quantitative easing involves the creation of electronic money by a central bank, by various means and for various ends and with various strings attached. QE involves the central bank using those funds to buy up debt and sit on it - typically, but not always, government debt. The new funds can be used by financial institutions who have now got rid of some of their debt. Those who are pro-QE say this turns into new investment. Those anti- say the banks use the funds just to deleverage (that is, dispose of other debt). A Keynesian like the Warwick university professor and author Robert Skidelsky will argue that, psychologically, QE can't be wholly effective unless the right investment environment exists - that is, unless monetary expansion is supported by government activity to create renewed confidence. That confidence then allows the rate of investment to increase and aggregate demand to rise. Moreover the low interest on government debt encourages investors to take bigger risks. It supposedly forces investors out of safe government debt and towards financing new, growth inducing projects. So far, so private-sector led. 

Here's the Chicago economist Robert Lucas on why he likes QE: "[It] entails no new government enterprises, no government equity positions in private enterprises, no price fixing or other controls in the operation of individual businesses, and no government role in the allocation of capital...These seem to me important virtues."

Corbyn's version of People's QE fills the gap in normal QE by creating an investment bank under government control. The Bank of England will buy bonds off the government-backed bank and the money will be allocated to finance infrastructure projects and other worthy causes. Basically, people's QE puts power over investing new money into the hands of the government and not into the hands of ailing private banks. It also dodges the perceived risks of government borrowing by placing the newly issued government bonds in the hands of the central bank, not the private sector. However, to the chagrin of monetary purists, it flies in the face of orthodoxies about central bank independence.

Why then the accusations that People's QE will produce inflation? The theory is that, if implemented in a growing economy, People's QE will stoke unsustainable, rapid increases in aggregate demand as per the 1970s. According to Yvette Cooper, “Quantitive easing to pay for infrastructure now the economy is growing is really bad economics." Her argument amounts to bad Keynesianism, however, as the policy is only intended for use in an economy operating at below full capacity (growth in 2015 so far has been a weak 0.3%; unemployment 5.4%; underemployment worse than any comparable EU country).

Of course, if a full blown economic recovery takes place between now and 2020 the policy will be ditched. But outside of property prices, financial services, and low paid employment this remains unlikely. Nevertheless the policy is a major affront to anyone who believes inflation is the central threat to economic stability.

Why does inflation, in the eyes of critics, result from stimulus? Demand-pull inflation is brought about by rising demand pushing up prices - but only as the economy reaches full employment. Cost-push inflation results from higher prices, presumably relevant in this case because a fall in the exchange rate of the pound would increase the cost of imports. 

What are the problems with assuming monetary stimulus will increase inflation (disregarding the fact we have already had a lot of monetary stimulus and no major inflation)? Against the quantity theory of money, Keynes argued that new money would only create inflation where the economy conforms to the classical model, in which there is no under utilisation of capacity and the labour market is always at its peak or tending that way. In other words, if there is no theory of a shortage of aggregate demand, prices will theoretically rise immediately with the printing of any new money. However, where new money is introduced in conditions of under utilisation, it can be directed towards investment and can stimulate the economy. If an amenable environment for investment exists, and there is sufficient direction by authorities, at least part of the new money will go towards increasing output. A depressed or under performing economy is one that is waiting for the chance to start doing more. Rising prices, when they come, are a sign of recovery - not that something has already gone disastrously wrong. As Richard Murphy has argued, People's QE will be phased out if inflation starts to rise above target levels.

Should we be concerned about a weakening currency? A greater quantity of money should weaken the value of the pound relative to other currencies. A depreciating currency is bad for those who need to finance imports, which the UK is heavily reliant upon. It can also make foreign debt obligations harder to meet. A counter-argument is that depreciation is good for cost-competitive exports. It can also prompt local firms to meet some of those import needs themselves. 

However, these were precisely the risks of flooding banks with liquidity from 2008 on, which is what normal QE has done. The risks here are the same. That is why many in the economics profession may not like People's QE, but don't think it's a crackpot lefty plot to tank the economy. The reason they don't like the policy is that it replaces a central bank-controlled policy with a public one. For public choice theorists this is unacceptable because democratic government is always and everywhere a bad monetary manager suffering from a permanent inflationary bias. 

The strict theoretical feasibility of the policy is not the real issue then. The objection among economists boils down to an issue of control - that of the government or the central bank. Labour politicians have been taking the political objection of economists and intensifying it. Buried within the concerns about runaway inflation lurks the folk memory of a "run on the pound." That phantom is supposed to rear its head when governments do silly things that scare the markets and prompt investors to ditch the pound. It is a constant threat to over-spending Labour governments (despite the fact currency runs normally take place when the government tries to maintain a fixed currency peg against depreciating trends, for example, in 1992, when Britain famously "crashed out" of the European Exchange Rate Mechanism because of speculation against the pound, that time under a Conservative government). At the moment the pound is very strong and is floating freely against its weaker rivals. The likelihood is not that speculators will crash the pound simply because spending gives them jitters about inflation.

The point here is not to deny that speculation against the pound will take place under a left-leaning government. As Michal Kalecki, the Polish economist, observed, the objections to Keynesian style demand management are not purely economic. The boost to demand by a government deficit or an investment bank can raise profits. Public debt becomes private wealth. If the central bank holds the debt that finances infrastructure, a currency run is made even less probable. Here, however, we are not dealing with individual, self-interested, rational actors but with class power. Finance capital objects to Keynesianism on class grounds because Keynesian policies create a more equitable distribution of wealth, empower the public through greater employment and income, and - via inflation - erode the value of existing debt. In other words Keynesian policies threaten to heavily restrict the power of capital, embedding it in a social framework built around equitable outcomes. The contemporary result is not Keynes's "euthanasia of the rentier" but the effective handcuffing of the financier.

For what it's worth, I believe our economic woes run much deeper than the need for Keynesian stimulus. I also believe that, the moment inflation or other vulnerabilities kick in, finance capital will restrain activity and choke off a demand-centred growth path. This is not about the fundamental mechanics of a capitalist system but about this particular capitalist era, labelled "financialisation" by the economist Costas Lapavitsas. The great power of finance in contemporary capitalist society will have to be reduced. Ultimately, if wealth is to be effectively redistributed, the financial sector will have to be placed under public control and serious moves towards a meaningful redistribution of skilled work will have to he made, perhaps involving a universal basic income and limits to the length of the working week. These cannot be achieved in the framework of a "minimum program" or over the course of a single parliament by a lone government. Concrete measures to increase social welfare and the social wage can come first. But a serious anti-capitalist alternative will have to consider ways of defeating both capital's stranglehold on investment and its stranglehold on labour in the long run. It will take more than a left leaning government to achieve these things. In fact, it will take lengthy and dedicated popular mobilisation.







Monday, 10 August 2015

Britain Causes Much Devastation - And Refuses to Admit the Human Costs

Philip Hammond, the UK's Conservative Foreign Secretary, accuses migrants of "marauding" Europe - totally ignoring Britain's military and economic devastation of many African and Middle Eastern countries, resting on policies he has himself designed and promoted. 

Hammond was Defence Secretary at the time Parliament voted against David Cameron's bill for intervening in Syria in 2013. He described the failure of the Bill as a "disappointment" and put it down to a hangover from Iraq. His voting record shows that he almost always supports using British military force abroad. Like most of the Conservative Party he voted blindly at every stage for the Invasion of Iraq in 2003. He has strongly supported military intervention in Afghanistan, Syria and again in Iraq. In other words, he is a pretty bullish hawk. His record on military matters is available here: http://www.publicwhip.org.uk/mp.php?mpid=40944&dmp=6688

Syria ranks as the single highest contributor of migrants and refugees to Europe (31% in 2014). You don't have to look far to see why. British foreign policy on Syria has flip-flopped since 2011, with Britain mostly attempting to funnel weapons and support to the so called civil opposition. The latter, however, turned out to mean all things to all people, excluding of course violent Jihad. It was duly supplanted by IS - in other words, violent Jihad - and the government now decided it was best to bomb civilians instead. Cameron was beaten on military intervention in 2013 only to be backed up later when ISIS emerged. Hammond, however, has been ever so consistent in support for the military option.

Moreover, on the rare occasion when he does not support direct military intervention in the Middle East and North Africa he boasts about the use of British made materiel in the region. Saudi Arabia, one of the world's greatest consumers of arms via its petrodollars, is currently waging an assault on Houthi "rebels" in Yemen. Hammond said the UK would do all it could to support the Saudis. The Red Cross, meanwhile, describes the situation there as a "humanitarian crisis." The destabilisation of Yemen has simultaneously empowered Al-Qaeda in the Arabian Peninsula and allowed ISIL to gain a toehold in the country.

Hammond is on record as supporting reactionary Saudi ambitions in the region, with the cost being violent turmoil and the growth of radical theocratic and jihadist movements. Meanwhile, he blamed the terrorist attack by a radicalised gunman on British tourists in Tunisia on the infiltration of Libya by ISIL. He describes Libya as an "ungoverned space," but failed to reflect on the causes of Libya's collapse. Might the collapse of that state have something to do with what Hammond himself once described as Britain's "central role" in the downfall of Gadaffi? He said at the time: "Now that campaign is over, of course I would expect British companies to be, even today, British sales directors, practically packing their suitcases and looking to get out to Libya and take part in the reconstruction of that company as soon as they can."

Somewhat optimistically, Hammond was pleading the case for British economic involvement in the country's reconstruction back in 2011. Since we had been so useful to the Libyans (with our naval patrols and our bombs), he argued, British companies should reap the rewards of the newly open economy. Only four years later, he blames the same situation for terror attacks - though on this more recent occasion he is less happy to accept British credit for it. Libya is now a failed state in which radicalism proliferates. It has done so not because of the inherent lure of ISIL but because the west keeps forcibly collapsing states.

A great many migrants depart from Libya to reach Europe. According to the UNHCR, last year 31% of all migrants and refugees entering Europe in 2014 were from Syria. Hammond - perhaps voicing the convictions of his party - views escalation of the offensive against ISIL's "Syrian heartland" as essential. It never seems to occur to Hammond that, where bombs fall, groups like ISIL thrive. Furthermore, when countries invade or civil wars are flamed by military and technical support, stability and states collapse. What follows is a spike in migration as slow-burn econic and political crises become humanitarian catastrophes. 

In the case of Eritrea, EU officials (including Norwegians, Italians and - of course - the British) are suspected by the UN of seeking deals with "Africa's North Korea" which will allow them to return refugees and migrants to face the consequences in their home country. Eritreans make up 18% of migrants arriving in Europe from Africa and are the second largest national group after the Syrians. What this suggests is a willingness to tolerate authoritarian regimes when it suits European governments, even to disregard legal entitlement to refugee status out of political convenience. According to the Guardian the UK has recently cut acceptance of Eritrean migrants and refugees from 23 to just 13% in 2014. Hammond reiterated the attitude behind that change today: “So long as there are large numbers of pretty desperate migrants marauding around the area, there always will be a threat to the [euro] tunnel security. We’ve got to resolve this problem ultimately by being able to return those who are not entitled to claim asylum back to their countries of origin.” 

He blamed migration on self-seeking individuals wanting to cash in on Europe's wealth: “The gap in standards of living between Europe and Africa means there will always be millions of Africans with the economic motivation to try to get to Europe." This is a painfully reductive argument. Migration is of course partly self-interested. Motivations are surely mixed. As with so many social phenomena we cannot differentiate between purely virtuous and non-virtuous migratory movements. Indeed, many of those moving for purely economic reasons do so because of a reduction in living standards caused by economic liberalisation on western orders. Life need not involve political persecution for it to become unbearable. 

Hammond's position is to reduce migration to a self-interested economic matter - and to thereby justify returning migrants to their home countries. This, likewise, is David Cameron's position: migrants choose Britain because it is "a fantastic place to live." (Actually Britain is only seventh on the list) Not for reasons of language or family or social connections. By doing this they ignore British responsibility for wars and economic and social crises and place the blame on the migratory individual selfishly seeking a better life. 

Not only has the UK government been among the most hard-line anti-immigrant voices in Europe, its belief in the virtuous combination of military intervention with the opening up of domestic African and Middle East economies has made it one of the most aggressively hawkish. While it is true that economic development (which requires industrial protection and social welfare) takes a long time to stem migration, an end to western-funded, influenced or led wars would certainly slow migratory movements. 

Philip Hammond wants neither to accept British responsibility for the destruction of so many African and Middle Eastern lives nor to shoulder his fair share of the ensuing humanitarian disasters. This abdication of responsibility is not unique to him. His comments about "marauders" are just the latest a slew of derogatory comments by leading government figures. David Cameron - himself the author of a controversial quip about migrant "swarms" - today backed up Hammond.   

The real threat, of course, is not of the migrants to us but of us to them. The grim realities of the world today point to a deep contradiction in the thinking of free marketeers: on the one hand, they believe the world should be "made safe for markets", with military intervention leading to stability and economic development. When those fail they back away from the logical implications of a free market world imposed by violence - that is, the free movement of people. They argue for free movement of capital, which usually follows in the wake of bombs. No freedom, however, for those seeking to escape the effects of their violence.

Hammond has so blatantly contradicted himself on migration and military intervention not because he is stupid, but because these contradictions serve his political purposes. 



http://www.telegraph.co.uk/news/worldnews/africaandindianocean/libya/8841923/Gaddafis-death-British-businessmen-should-be-heading-to-Libya-for-contracts.html

Friday, 7 August 2015

Ruling the Void; Governing the Absurd


On the topic of my earlier post about the power of the state and the imposed legality of Europe, to wit: Yanis Varoufakis on the acute migraine that is life as Greek Finance Minister:

“Our state apparatus had been contaminated by the Troika, very, very badly. Let me give you an example. There is something called the Hellenic Financial Stability Facility, which is an offshoot of the European Financial Stability Facility [EFSF]. This is a fund that contained initially €50 billion – by the time I took over it was €11 billion – for the purpose of recapitalising the Greek banks. This is money that the taxpayers of Greece have borrowed for the purpose of bolstering the banks. I didn’t get to choose its CEO and I didn’t get to have any impact on the way it ran its affairs vis-à-vis the Greek banks. The Greek people who had elected me had no control on how the money they had borrowed was going to be used.

“I discovered at some point that the law that constituted the EFSF allowed me one power, and that was to determine the salary of these people. I realised that the salaries of these functionaries were monstrous by Greek standards. In a country with so much hunger and where the minimum wage has fallen to €520 a month, these people were making something like €18,000 a month.

“So I decided, since I had the power, I would exercise that power. I used a really simple rule. Pensions and salaries have fallen by an average of 40% since the beginning of the crisis. I issued a ministerial decree by which I reduced the salaries of these functionaries by 40%. Still a huge salary, still a huge salary. You know what happened? I got a letter from the Troika, saying that my decision has been overruled as it was insufficiently explained. So in a country in which the Troika is insisting that people on a €300-a-month pension now live on €100, they were refusing my cost-cutting exercise, my ability as a minister of finance to curtail the salaries of these people.”


This situation of absurd bureaucratic opposition by Europe to even the most obvious streamlining of public costs  reminds me of nothing so much as the Polish economist Michal Kalecki's observation that "obstinate ignorance is usually a manifestation of underlying political motives." As Varoufakis says, "The class-consciousness of the Troika was mind-boggling." 

In short, the European powers are much less interested in sorting out the Greek state than in maintaining their own disciplinary power. Even within their own institutions they would not accept concrete proposals that cut costs. Rather than rationally pursuing their self-interest (which is surely to allow the Greek state to grow, collect some of their debts, collaborate in reform of the state, etc.) they want to neutralise any threat to what is ultimately - guff about trans nationalisation of constitutional law aside - a form of class power. The inefficiency and corruption of the Greek state, the nakedly corrupt and manipulative Greek oligarchy, in the end matter far less to the Europeans than the prospect of a pro-working class reflation of the Greek economy. It is the latter they have worked so hard to stamp out.

Thursday, 6 August 2015

The Perils of Success

The left is emerging as a powerful force in European politics, whilst simultaneously being robbed of its illusions about power.

Recent developments suggest a cruel reality for left politics: Syriza is elected in Greece to be promptly defeated by the furrows of the Greek state, the oligarchy, and the European creditors. Podemos and left cohorts win power in Barcelona only to tank in the polls. Germany's Die Linke proves an internally divided - but federally singular - opposition to austerity in the Bundestag. The Front de Gauche sinks from its 2012 highs, while in tiny, ex-socialist Slovenia, a young, radical Left rises. In Britain the collapse of traditional social democracy is seemingly made plain in the May elections, only for a radical grassroots movement to spring up around the socialist Jeremy Corbyn. The list of radical movements gathered in and around political parties of various effectiveness (Sinn Fein, the Scottish National Party) is long; the trend, clear.

All this in the past eight months alone. Make no mistake: left-wing politics is returning definitively to Europe. The crisis cycle starting in 2008 - once widely perceived as an issue of economic managerialism with a niggling, if violent, social component - has mutated into a political regime crisis, though not yet one of the state. As Nicos Poulantzas, the great Marxist theorist put it, "Economic crisis, then, can translate itself into political crisis.  But this does not imply a chronological concordance."

The progress made on all fronts is hardly uniform. The timing is often out. Things do not simply fall into place - the world is not like that. Precisely because of the geographic and sectoral shifts of the crisis (from banks to fiscal budgets to the very architecture of the single currency), the political response is delayed and bursts forth in one place only to retreat elsewhere. 

How have left movements and parties responded to the rolling and splitting crisis, its uneven and combined development? A singular example - Europe's most advanced case - crystallises the general form.

Syriza in Greece took power with a deeply contradictory policy: end austerity, keep the euro - a policy that was mediated at every point by the European powers. So the policy failed, of course. The real problem was the failure to understand that central contradiction and to exploit it. Syriza fatally mistook the concentrated power of the European treaties for an open, negotiable body. It also uniformly failed to attack the basis of the Greek oligarchy and the crumpled state apparatus that serves them so well. Its failure was double: to generate an alternative to blind pro-Europeanism and to begin to transform the state and media apparatus into something more transparent and democratic. 

That case is advanced relative to other left political movements, but that is precisely why it is exemplary. More generally, there is an achingly clear absence on the left of planning for what happens when the power of the state; the power of European enforced legality, the power of markets; and the power of the media strikes back against their initial popular-democratic successes. The attack by the powerful on a government of the left will be vicious. This viciousness will be more than rhetorical. It will not be a war of words alone. Power has two aspects: hegemony and domination. The latter runs like a buried stream within the former. It becomes decidedly more prominent when transgressions are made. Here concrete modes of violence will come into play.

In short, the right and all pro-capitalist forces will cease to mock the democratic and popular left forces and turn their attention to the well-practised art of annihilation. They will mobilise the press, of course. But they won't stop there. Markets can go on strike against workers. Even if they do not do so automatically, they can be forced to - witness the Greek banking sector after the deliberate tightening of ECB liquidity. The apparatus of the state - already hostile to the left - can and will seize up. Transnational, post-democratic treaties come into effect, cutting off vital funds to those who transgress.

Left governments will likely not be fighting verbal battles. They will be confronting the massed power of the state. If they do not prepare, war-like, for that confrontation, they will first be starved and then roundly ejected from their tiny governmental perch within the state apparatus.

Yes, there's power in a political movement - psychological strength; social solidarity; moral vindication; popular and democratic legitimacy, and so on. But the "power bloc" composes itself within not only the central organs of the state, but also its various tendrils (the central bank; the judiciary; various think tanks and the largely obedient media). A tangle of lobbies, think tanks, party cadres, intellectuals, researchers and journalists are bundled into the latter, mediating between popular opinion and elites. "Never mind your popular mandate and your moral righteousness," is their attitude. "We're going to destroy you." That after all is the Machiavellian lesson of power: it is not commanded by popular sentiment or dictated to by morality, but rather overdetermines it. We saw precisely this in Greece. 

We saw this in Greece and - despite decades of reading our Machiavelli, our Lenin, our Gramsci - we were surprised. It was almost as if there was a gap between theoretical and practical knowledge. Of course that old bogeyman, the Marxist-Leninist dialectic, had a thing or two to say about the developing relation between theory and practice. But one moment of that dialectic - practice - is resoundingly failing to respond to the concrete situation. One could say the Left is demobilised by all the potent fetishes of liberal democracy. The weakness originates in what is for many of us a simple truth: we are inexperienced in dealing directly with power. We on the radical left studied the critiques but failed to develop their practical aspects. In other words, we took liberal democracy at its tolerant, inclusive word. History proves that neoliberal capitalism will not tolerate the slightest dissent from its strictures.
  
A mass movement can be beaten. Its social power is by no means irresistible. It will not, by sheer hugeness, overwhelm the state, unless it is also combative. Popular democratic will means nothing if it offends the good taste of those in power. A left movement must of course have a political articulation (gone are the days when people thought you could change the world by not taking power). But getting elected and forming a government are not alone enough either. Here the political representation of the movement must develop rapidly, from a historically low ebb, to radical conclusions. The situation is not ideal - but as history shows, the right moment never comes. So the movement must also push a reticent leadership forward.

Again, the point is both specific and general. In Britain the movement to elect Jeremy Corbyn Labour leader betrays all the signs typical of the European left as a whole. It believes the Party leadership, the parliamentary system, the oligarchic media and the state qua state will tolerate their democratic victory. Or rather they believe that, by peaceful demonstration of their democratic and popular mandate, they can get a slither of what they want. 

If this were true, Syriza would be reflating the Greek economy with the help of European investment funds as we speak. Instead it is locked in a vicious austerity drive, implemented by a radical left government supposedly intent on ending austerity. 

This fact cannot be stressed enough: the left will have to attack its enemies aggressively if it is to survive the existential peril of victory. Were Corbyn to defy all odds and win the Labour leadership he would immediately have to democratise the Party, allowing his supporters much greater access to decision making processes. Winning real power over the Labour Party will take an offensive struggle. The watchword "unity" would have to go out of the window. If the majority of members supported him, Corbyn would have to fight against his own MPs to entrench his democratic support base within the Party. Otherwise he would be isolated and crushed by the party logic.

When the political articulation of a mass movement is put through the ringer and promptly hung out to dry, the movement can very easily dry out too. We socialists will be left crowing from the sidelines as a "unity" candidate picks up second preference votes. With due nods to radical hopes, they will revert to centrist type.

These are bold conclusions, but they are well-founded. It is crucial in the weeks ahead that the movement around Corbyn prepares for this struggle.