The Eurozone crisis and the Greek referendum
Of course Papandreou’s referendum on the latest EU bailout package is a thoroughly opportunist and, perhaps, desperate move. And of course, he’s hoping that the Greek electorate will vote “yes.”
Costas Lapavitsas, a SOAS professor and member of Research on Money and Finance is anti-EU and looks forward (in an article in today’s Guardian) to the “unravelling” of the Euro:
“The import of Papandreou’s move, however, is that it has put the real dilemma of this crisis in front of the Greek people. If debated freely, there would be no guarantees that the Greeks would opt for the euro. And if they chose to quit, it is possible the monetary union would begin to unravel.
“Greece quitting the euro of its own accord would probably come as a surprise to policymakers in the EU. They never really intended to drive Greece out since the risk to banks would be enormous. Misled by the meek attitude of the Greek government, they imposed ever harsher measures, imagining they were doing Greeks a favour. Someone in the bubble of Brussels should have told the decision-makers what was really happening among Greece’s grassroots.
“The real risk [to the EU policymakers] was always that Greece would be forced by necessity to break free of the euro, and this is now more likely than ever.”
The Graun‘s own economics editor Larry Elliott takes a different view:
“…(I)n Papandreou’s favour is that if Europe is a problem for Greece then Greece is actually an even bigger problem for Europe. If ever there was a case of ‘when you owe the bank €1000 you have a problem but when you owe €100bn the bank has a problem’ then this is it. The question for Greece’s partners in the single currency and for the International Monetary Fund is whether they want to push the Greeks so hard that they vote no to the deal, or whether they are prepared to soften the terms in order to safeguard against a disorderly default and all that implies.
“My hunch is that even if the Greeks vote no then it will still get enough money to prevent it defaulting because the stakes for the rest of Europe are so high. Europe does not have a Plan B in the event of a Greek default. Let’s be honest, it still doesn’t have a fully worked out Plan A. It needs time to get its act together (assuming that it is actually possible) and will probably be prepared to buy time by making life easier for the Greeks. Papandreou is in a stronger position than people think.”
But either way, what Lapavitsas and the anti-EU “left” repeatedly fail to explain is how a specifically anti-EU (or even anti-Euro) campaign takes the struggle against austerity and for a socialist alternative, forward in any way an all. If the Greek referendum goes ahead (and it’s by no means certain that it will), there may be a case (depending upon how the questioned is posed) for advocating a “no” vote. But far more important will be the continuation of the strikes and occupations that have been taking place across Greece since September.
The following article, in Q and A form, from Workers Liberty’s paper Solidarity was written before Papandreou announced the referendum, but turns out to be remarkably prescient:
What’s behind the series of crises in the eurozone?
As Karl Marx explained over 100 years ago, a developed credit system both gives greater elasticity to capitalist production and accentuates capital’s tendencies to overproduction and overspeculation.
From the early 1980s to 2008, global credit markets expanded enormously. They developed a dizzying variety of new forms of credit, and a dizzying speed at which different forms of credit could be exchanged with each other.
That expansion helped propel the expansion and restructuring of capitalist production known as “globalisation”. It set the scene for a series of crises, but until 2007-8 the whirl of expansion was able to pick up again relatively fast after each crash.
The crash of 2008 was big enough that governments had to nationalise or bail out major banks — “socialism for the rich”, “socialising losses” after an orgy of “privatising gains” — and world trade shrank sharply in 2009.
A crisis, as Marx explained, brings “a tremendous rush for means of payment — when credit suddenly ceases and only cash payments have validity”. Except that in today’s capitalism there is no really “hard” cash.
Every form of “cash” — US dollars, British pounds, euros — is only an IOU issued by one government or another, or, for the euro, a group of governments.
But that’s three years ago…
Capital has been unable to go back to a more “sober” way of life. The lurch of capitalist policy away from neo-liberalism which many predicted in 2008 has not happened.
Capital is still drunk on credit. The global amount outstanding on foreign exchange derivatives rose from $14 trillion in 1999 to $63 trillion in mid-2008, then fell back to $49 trillion (mid-2009), but has risen again to $58 trillion (mid-2010).
Capitalist governments have more extensive credit than banks. They were able to intervene to save the banks in 2008. But that intervention strained their credit, and in a time when global credit markets were becoming tighter. At the same time governments’ incomes shrank because of the downturn in trade and production following the financial crash.
Most governments now depend on getting credit in global financial markets, not on siphoning savings from their own citizens as they used to. For eurozone governments the discipline is especially tight, since they cannot print their own money, and the European Central Bank was set up with rules that limit its assistance to governments.
Some eurozone governments were bound to run into credit difficulties. The first were Greece, Ireland, and Portugal. For Greece especially, each “bail-out” (they are actually “bail-outs” for the mostly French and German banks which have lent to the Greek government, not for the Greek people) has only made things worse.
The cuts imposed on Greece have reduced production in Greece, and hence the Greek government’s income, and made it even more unable to borrow on global markets.
If the Greek government is left simply unable to make its due payments, then the consequences not just for Greece but for capital across Europe will be huge.
French and German banks which hold Greek government debt will become insolvent and need to be bailed out (again) by the French and German governments.
The French government’s credit rating has already been put in doubt because of the mere risk of such a thing happening. At the next step down the road, France would become another, but much larger, Greece.
Lenders in the global credit markets who have seen Greece go down will wonder who’s next, and become more reluctant to lend to, for example, the Italian government. That will be self-reinforcing: because Italy won’t be able to get new loans, it will be unable to pay back old ones, and so it will be even less able to get new ones. Already Italy has to pay interest rates well above the odds to borrow on global markets.
Can the eurozone and EU summits set for Wednesday 26 October fix things?
Such “crashes” would be much bigger than the collapse of Lehman Brothers, which set off the global crisis in September 2008.
They could well lead to the collapse of the eurozone, and a retreat by European governments back to national currencies (or possibly smaller currency unions). The impact of that on European capital, which depends day to day on the low costs of doing business across Europe, will be huge. Because the costs of not doing so would be so big, European leaders will come up with some scheme or another on 26 October.
They will find some way to patch things up for a while. As the previous so-called “bail-outs” patched things up for a while, only to make them worse longer-term.
Just patch things up for a while, or solve the crisis?
In principle the big powers of the eurozone have the financial clout to solve the credit problems of Greece and even of Italy.
We should not underestimate the power and resourcefulness of capital. The cuts programmes in Ireland and Spain are brutal, but they are “working”, so far, in capitalist terms.
Since the EU’s leaders know that the crisis is so dangerous, it is possible that on 26 October they will do something more radical than expected. But radical enough to restabilise government finances across Europe? That seems pretty much impossible, if only because the processes of compromise necessary for eurozone and EU decisions are too cumbersome.
Wolfgang Münchau writes in the Financial Times (24 October): “The triple A rated [strong credit] countries [like Germany] have left no doubt that they are willing to support the system, but only up to a certain point. And we are well beyond that point now… I believe… European leaders will agree a deal. My concern is not about failure to agree, but the consequences of an agreement….”, which he says, could put the EU on course for a “catastrophic” outcome, “maybe only a few weeks or months away”.
Moreover, given who is devising it, any deal is certain to include further attacks on workers’ conditions and rights, and not only in Greece. The probability is a deal which attacks workers’ conditions and rights, but only delays the crisis.
The outside chance is a deal which patches things up for a bit longer, but at the cost of even sharper attacks on workers’ conditions and rights.
Won’t a breakdown of the capitalist EU be a step forward for the opponents of capitalism?
No. It is not true that the worse for capitalism, the better for socialists. Anguish from crashes and crises may provoke a fightback that brings great progress, but only if the socialists are, and are seen to be, fighting for a rational programme to mend things.
A break-up of the existing economic coordination of Europe will bring huge economic disruption, unemployment, pauperisation, and a boost to right-wing, nationalist, backward-looking politics. It is not within the power of socialists either to prevent, or to provoke, such a break-up, but it is within our power to argue for a better form of economic coordination, rather than short-sightedly rejoicing at the break-up.
The project of the European single currency was botched from the outset, in 1999-2000 — hurried through on the wave of capitalist triumphalism typical of the time, and with questions about how it would deal with tricky imbalances glossed over.
Against regression to a Europe with new barriers between countries, we should counterpose European unity on the basis of democracy, social levelling-up, and workers’ unity across the frontiers.
What would that mean?
European high finance is endemically crisis-prone. European banks have $55 trillion outstanding in loans, four times more than US banks do.
To make those loans, they have borrowed $30 trillion from “wholesale” markets — essentially, from other banks and corporations, rather than less volatile borrowing from households — ten times more than US banks.
The latest declaration by the European Trade Union Confederation calls for:
“Eurobonds to facilitate investments for sustainable jobs, a financial transaction tax…, the end of tax havens, tax fraud and evasion, and a halt to tax competition”. That is too little, too abstruse, too disconnected from action on the ground.
Labour movements across Europe should unite to demand, as an emergency measure, the expropriation of European high finance, and its conversion into a Europe-wide banking, mortgage, and pension service.
Greece’s debt should be cancelled, and a new beginning made. Social minima and workers’ rights should be levelled up across the continent.
Four lines
Robert Graves has come up in the thread below, so here’s a short poem of his:-
Love Without Hope
Love without hope, as when the young bird-catcher
Swept off his tall hat to the Squire’s own daughter,
So let the imprisoned larks escape and fly
Singing about her head, as she rode by.
Robert Graves (1895-1985)
Larkin: “the shit in the shuttered chateau”
Photograph by Fay Godwin
I hadn’t come across this Larkin poem before last weekend. It’s not one of his best, but it made me laugh:
The Life with the Hole in It
When I throw back my head and howl
People (women mostly) say
But you’ve always done what you want,
You always get your way
- A perfectly vile and foul
Inversion of all that’s been.
What the old ratbags mean
Is I’ve never done what I don’t.
So the shit in the shuttered chateau
Who does his five hundred words
Then parts out the rest of the day
Between bathing and booze and birds
Is far off as ever, but so
Is that spectacled schoolteaching sod
(Six kids, and the wife in pod,
And her parents coming to stay)…
Life is an immobile, locked,
Three-handed struggle between
Your wants, the world’s for you, and (worse)
The unbeatable slow machine
That brings what you’ll get. Blocked,
They strain round a hollow stasis
Of havings-to, fear, faces.
Days sift down it constantly. Years.
As I Please
Since Tribune is in the news, here’s an extract from one of George Orwell’s As I Please columns, which are proto blog posts. This particular column goes to prove that Karen Armstrong and Terry Eagleton are not new phenomena. Their cloud and vapour blowing at crude rationalists who coarsely ask them if the tenets of the religion they defend are true or not were around in 1944.
It . . . appears from my correspondent’s letter that even the most central doctrines of the Christian religion don’t have to be accepted in a literal sense. It doesn’t matter, for instance, whether Jesus Christ ever existed. ‘The figure of Christ (myth, or man, or god, it does not matter) so transcends all the rest that I only wish that everyone would look, before rejecting that version of life.’ Christ, therefore, may be a myth, or he may have been merely a human being, or the account given of him in the Creeds may be true. So we arrive at this position: Tribune must not poke fun at the Christian religion, but the existence of Christ, which innumerable people have been burnt for denying, is a matter of indifference.
……what my correspondent says would be echoed by many Catholic intellectuals. If you talk to a thoughtful Christian, Catholic or Anglican, you often find yourself laughed at for being so ignorant as to suppose that anyone ever took the doctrines of the Church literally. These doctrines have, you are told, a quite other meaning which you are too crude to understand. Immortality of the soul doesn’t ‘mean’ that you, John Smith, will remain conscious after you are dead. Resurrection of the body doesn’t mean that John Smith’s body will actually be resurrected – and so on and so on. Thus the Catholic intellectual is able, for controversial purposes, to play a sort of handy-pandy game, repeating the articles of the Creed in exactly the same terms as his forefathers, while defending himself from the charge of superstition by explaining that he is speaking in parables. Substantially his claim is that though he himself doesn’t believe in any very definite way in life after death, there has been no change in Christian belief, since our ancestors didn’t really believe in it either.
….
the Catholic intellectuals who cling to the letter of the Creeds while reading into them meanings they were never meant to have, and who snigger at anyone simple enough to suppose that the Fathers of the Church meant what they said, are simply raising smoke-screens to conceal their own disbelief from themselves.
Tribune, 3 March 1944
UNESCO recognises Palestine
A good moment:
This is a small but important step forward for the Palestinian people, and all those who seek a just solution to the Isreal/Palestine conflict.
But it’s not only the Israeli and the US governments who oppose Palestine’s recognition; so, too, do ‘irreconcilables’ on the Palestinian side (aka political antisemites) who deny Israel’s very right to exist: him. for instance; and her.
Those of us who long for peace in the Middle East, and a just solution for Jews and Palestinians, must welcome UNESCO’s vote and continue to proselytize for Two States.
Trotsky on anti-semitism
Now that even the New Statesman (well, one writer on its blog) seems to be willing to accept that anti-semitism (a) exists and (b) is A bad Thing, it seems an appropriate time to remind people of Leon Trotsky’s stance on “The Jewish Question” (he actually wrote “Jewish Problem“…), and specifically on anti-semitism. Here’re a couple of excerpts from his long (ish) 1937 article, ‘Thermidor And Anti-semitism.’
NB: Birobidzhan (Russian: Биробиджа́н; Yiddish: ביראָבידזשאַנ) is a town and the administrative center of the Jewish Autonomous Oblast, Russia created by Stalin in 1928 and given town status in 1937. Trotsky’s attitude towards it is of particular interest in the context of later debates about Zionism and Israel (Trotsky, of couse, didn’t live to see the creation of Israel):
“At the time of the last Moscow trial I remarked in one of my statements that Stalin, in the struggle with the Opposition, exploited the anti-Semitic tendencies in the country. On this subject I received a series of letters and questions which were, by and large – there is no reason to hide the truth – very naive. “How can one accuse the Soviet Union of anti-Semitism?” “If the USSR is an anti-Semitic country, is there anything left at all?” That was the dominant note of these letters. These people raise objections and are perplexed because they are accustomed to counterpose fascist anti-Semitism with the emancipation of the Jews accomplished by the October Revolution. To these people it now appears that I am wresting from their hands a magic charm. Such a method of reasoning is typical of those who are accustomed to vulgar, nondialectical thinking. They live in a world of immutable abstractions. They recognize only that which suits them: the Germany of Hitler is the absolutist kingdom of anti-Semitism; the USSR, on the contrary, is the kingdom of national harmony. Vital contradictions, changes, transitions from one condition to another, in a word, the actual historical processes escape their lackadaisical attention…
…”In the opinion of some “Friends of the USSR,” my reference to the exploitation of anti-Semitic tendencies by a considerable part of the present bureaucracy represents a malicious invention for the purpose of a struggle against Stalin. It is difficult to argue with professional “friends” of the bureaucracy. These people deny the existence of a Thermidorian reaction. They accept even the Moscow trials at face value. There are not “friends” who visit the USSR with special intention of seeing spots on the sun. Not a few of these receive special pay for their readiness to see only what is pointed out to them by the finger of the bureaucracy. But woe to those workers, revolutionists, socialists, democrats who, in the words of Pushkin, prefer “a delusion which exalts us” to the bitter truth. One must face life as it is. It is necessary to find in reality itself the force to overcome its reactionary and barbaric features. That is what Marxism teaches us.
“Some would-be ‘pundits’ have even accused me of ‘suddenly’ raising the ‘Jewish question’ and of intending to create some kind of ghetto for the Jews. I can only shrug my shoulders in pity. I have lived my whole life outside Jewish circles. I have always worked in the Russian workers’ movement. My native tongue is Russian. Unfortunately, I have not even learned to read Jewish. The Jewish question has never occupied the center of my attention. But that does not mean that I have the right to be blind to the Jewish problem which exists and demands solution. ‘The Friends of the USSR’ are satisfied with the creation of Birobidjan. I will not stop at this point to consider whether it was built on a sound foundation, and what type of regime exists there. (Birobidjan cannot help reflecting all the vices of bureaucratic despotism.) But not a single progressive, thinking individual will object to the USSR designating a special territory for those of its citizens who feel themselves to be Jews, who use the Jewish language in preference to all others and who wish to live as a compact mass. Is this or is this not a ghetto? During the period of Soviet democracy, of completely voluntary migrations, there could be no talk about ghettos. But the Jewish question, by the very manner in which settlements of Jews occurred, assumes an international aspect. Are we not correct in saying that a world socialist federation would have to make possible the creation of a ‘Birobidjan’ for those Jews who wish to have their own autonomous republic as the arena for their own culture? It may be presumed that a socialist democracy will not resort to compulsory assimilation. It may very well be that within two or three generations the boundaries of an independent Jewish republic, as of many other national regions, will be erased. I have neither time nor desire to meditate on this. Our descendents will know better than we what to do. I have in mind a transitional historical period when the Jewish question, as such, is still acute and demands adequate measures from a world federation of workers’ states. The very same methods of solving the Jewish question which under decaying capitalism have a utopian and reactionary character (Zionism), will, under the regime of a socialist federation, take on a real and salutary meaning. This is what I wanted to point out. How could any Marxist, or even any consistent democrat, object to this?”
NB: information on Birobidzhan from Wikipedia
Occupy: For Good Against Evil!
A stupid fuckin’ eedjit writes:
“Strangely for a Marxist site very little coverage of the occupy wall street movement on this site and the crackdown by the police thugs of freedom loving imperialist state numero uno. One has to conclude that is not a coincidence to your pro imperialist views.”
For the record, ‘Shiraz Socialist’ is (generally) for Good against Evil (as illustrated below); guess which side we’re on in this particular instance…
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‘Shiraz Socialist’ does not attempt to comment upon every item in the news. We prioritise items that may be of particular interest to socialists and/or trade unionists; but even then, if we have nothing of originality or particular interest to add to what other commentators have already said, then we may not say anything at all. That doesn’t mean we think the matter is of no importance
You may have noticed, like “Steve” (quoted at the top of this post), that none here has commented upon the “Occupy” movement as yet. I should hope that it goes without saying that all of us at Shiraz support them, for all their incoherence. I, personally, agree with this.
By far the best and most perceptive reports of the London and other UK occupations, that I’ve seen, have been from ‘History Is made At Night’, here and here.
Anything that is supported by the Tory Richard Littlejohn, the Social Democrat Polly Toynbee and the Blairite Andrew Rawnsley, must be so banal as to be virtually meaningless. But that doesn’t mean they should be forcibly removed. As and when that happens, we must, and will, stand with them.
Trade unionists are urged to sign the trade union statement of support for the St Paul’s
occupation, backed by Mark Serwotka and John Mc Donnell…and pass it on!
http://www.petitiononline.com/tulsx/petition.html
This report from the AWL is interesting – especially regarding the antisemitism of the so-called ‘Zeitgeist Movement’ who have muscled in in the occupations.
The anti-EU “left” should read the Daily Mail
The anti-EU “left” should read the Daily Mail. I was tempted to go on, I would write that they might find more in it to agree with than they would expect. But that would be unfair. I suspect they would, in the main, be suitably appalled. By this poll , in Saturday’s Mail, for instance:
Worryingly for Mr Cameron, most of those
polled believe the 81 Eurosceptic MPs who rebelled in the Commons this week are
‘more in tune with Tory voters’ than the Prime Minister.
Three-quarters said rebel MPs were right to
defy his three-line whip. Mr Cameron admitted yesterday that he must ‘work
harder’ to persuade his backbenchers he is on their side.
The Daily Mail has learned that he has ordered
every Whitehall department to draw up a list of powers to be grabbed back from
Brussels.
Right, you Morning Star “lefties”: study that Mail poll, and study it good. Note the areas in which the Mail’s respondents want “powers returned”:
* Immigration (86%)
* Human rights law (71%)
* Employment law (65%)
…and you lot (the idiot-”left” who campaign against EU membership) still think your pathetic little “left” anti-EU campaign(s) can somehow be “progressive”? Wake up, you morons! Sometimes the left has to fight for leadership of public opinion…this is one of those times.
Louis at Hallowe’en: The Skeleton in the Closet
Ricky Riccardi (at The Wonderful World of Louis Armstrong) writes:
The song comes from Pennies From Heaven, Armstrong’s first major studio picture. He was hired for the film at the insistence of its star, Bing Crosby, a lifelong student, friend, collaborator and admirer of Pops. When the film came out, Armstrong got his own credit during the main titles, making him the first African-American to get featured billing alongside white actors. So Pops was pioneering, though some critics have frowned upon the way Armstrong was used in the film. Playing a bandleader who is hired by Crosby to perform at his nightclub, Armstrong’s “role, as written, makes one cringe,” according to Lawrence Bergreen. Bergreen quotes an exchange between Armstrong and Crosby in the film, comedically playing on the ignorance of Armstrong’s character, who asks for seven percent instead of accepting Bing’s offering of ten percent because his is a seven-piece band, “And none of us knows how to divide ten percent up by seven.”
Bergreen writes that this banter dwells “on black inferiority and subservience” but what he doesn’t mention is that Pops legitimately loved this scene, quoting it in front of friends on one of his later private tapes. One of Armstrong’s last television appearances was made with Crosby on the David Frost Show from February 10, 1971. During the interview portion, Armstrong talks about how much fun they had making the film and though 35 years had gone by, Armstrong quotes the entire “percent” scene, line by line, as it originally appeared in the film. Thus, it’s easy for a white critic to “cringe” while watching Pennies From Heaven but for Pops, funny was funny and he cherished the gags he was asked to deliver (and besides, would one “cringe” if the same exact dialogue was delivered by Stan Laurel or Chico Marx?).
Armstrong gets one music number to himself in the film and it’s a great one. “The Skeleton in the Closet” was written by Arthur Johnston and Johnny Burke, the same two men wrote the rest of the Pennies From Heaven score. Filmed in California, Armstrong was seen leading a contingent of some of the finest west coast jazzmen, including trumpeter (and Armstrong disciple) Teddy Buckner, saxophonist Caughey Roberts, future Nat Cole bassist Wesley Pince and as already advertised, the grand reunion of Armstrong and Lionel Hampton.
Hampton was in the midst of a steady engagement as a leader at the Paradise Nightclub in Los Angeles and was just about to explode. Pennies From Heaven was filmed in August 1936 and while out there, Armstrong asked Hampton to sit in on drums and vibes on two Hawaiian cuts made with “The Polynesians” on August 18. One week later, on August 24, Hampton took part in a Teddy Wilson session with Benny Goodman on clarinet and just a few months later, in November, Hampton joined Goodman’s Quartet and, well, you know the rest!
But for “Skeleton in the Closet,” Hamp sticks to the drums, wearing a mask to keep the whole “haunted house” motif going. This is Armstrong at his finest: storytelling, acting, singing, swinging and playing beautifully. Here’s the clip (a bit jerky, I’m afraid, but the soundtrack is fine):
As well as Hamp on drums, the band includes Joe Sullivan on piano.
A better-quality film of the same number (also including a Sullivan piano solo), here.
