Alexis Tsipras justified his humiliating U-turn, and commitment to imposition of austerity worse than he had just rejected, by saying that he had no mandate for Greece to exit the Euro. Very true. But he had just claimed that the referendum a week before had not been about the Euro. By 61 to 39 per cent he has no mandate for austerity, which is what he said the referendum was really about.
He came into office promising an end to failed bail outs and has ended with a third one bigger than the first. He called for debt reduction and now seeks support for debt inflation.
Such is the scale of the crushing terms of the latest ‘bailout’ that no one is attempting to say that it is nothing other than complete humiliation for Greece. Even the Eurozone bureaucrats stated the truth behind the unpalatable words spewed out by their leaders – Tsipras had been subjected to “mental waterboarding” and had been “crucified”.
What has been mental torture for Tsipras will be brutal and catastrophic austerity for the Greek people.
I could write a whole blog on the capitulation of Tsipras and what looks like the majority of Syriza, and there would be good political reasons for doing so. The policy and strategy of Syriza has been endorsed by Irish opponents of austerity such as Sinn Fein and these now lie in tatters.
In fact in my own view Sinn Fein is not even as radical as Syriza and this is an easy claim to substantiate. It has already implemented austerity in the North of Ireland while hiding behind opposition to some welfare cuts. In the South it supported the fateful decision to make the debts of corrupt banks and property speculators the burden of Irish workers and in doing so made the struggle against paying this odious debt much more difficult.
But there will be plenty of voices pointing out that what radical politics Sinn Fein has to offer have been trialled in a real life laboratory and been found wanting. The capitulation of Syriza is in principle no greater than the Republican’s own acceptance of British rule in Ireland, acceptance of partition, surrender of weapons and dissolution of the IRA. But that is all now a history that no one wants to talk about.
What is more important therefore is to try to understand what has happened and whether it could have been any different. Not that it must be accepted that the ‘coup’ against Greece cannot or will not be resisted. It can and will but it would be blindness to reality not to acknowledge that under Syriza the fight against austerity has suffered a demoralising defeat.
As that new aphorism says: it’s not the despair, I can take the despair. It’s the hope. Syriza gave hope.
Working out what has happened is not easy. For the man or woman on the street they see television reports of quantitative easing by the Eurozone involving the figurative printing of millions of Euros by the European Central Bank, yet this same institution is involved in the vindictive pursuit of Greece for sums it could easily accommodate.
The proposals of the conservative leaders of the EU seem equally hard to understand or justify. In fact for many they seem stupid, if not crazy. So draconian are they that they seem designed to achieve the very opposite of what they claim to be for.
The imposition of yet greater austerity when this austerity has demonstrably failed might be explained by ideological blindness. And the humiliation involved might seem to invite rejection while being another attempt to remove Syriza from office. But many commentators have explained that Syriza may possibly remain the only force that can push austerity through without complete chaos and collapse.
This humiliation is perhaps not just a message to a small and weak Greece but an unmistakeable one to a larger Italy and France: that the development of the EU will be under a model defined by Germany and its allies. Yet even here the degree of malevolence can only invite small countries with parties equally blinded by reactionary ideology as Germany to wonder just what fate would befall them in an EU with such a definition of ‘solidarity.’
So while ‘good’ reasons might be found for what would appear to be ideological blindness the proposal for a “timeout” exit by Greece from the Euro appears as simply stupid; unless of course it is also a means of pushing Greece out permanently. But then it is such a stupid idea as justification that its purpose might only seem to be how open the imperial bullying can become, ‘pour encourager les autres’.
For the Greek people the surrender of even nominal control of their affairs is way beyond what has gone before. The original proposal to ring fence €50 billion of Greek assets under German control, to be sold at the discretion of its creditors, was such an open declaration of debt bondage as to render the humiliation utter and complete. What is yours is no longer even yours to sell. Now it is reported it will simply be wasted on insolvent Greek banks with the needs of financial capital once again talking precedence not only over people but over real productive activities.
Thus in many ways, its failure to actually work being the first, its effects on undermining the legitimacy of the EU second and materially weakening the incentives to solidarity among its members third, all make the bailout deal a defeat for the idea of a European Union. This is not even a European imperialism to rival the US, Russia or China but an imperial core and vassal periphery.
The price being paid seems so unnecessary because the main demand of Syriza – in order to give hope and reduce the impact of austerity, i.e. debt forgiveness, will be given and is already hinted. Not in the shape of outright reduction but in the form of postponing or extending repayments and similar measures on the interest due. After all, what cannot be repaid will not be repaid.
What matters however to the right wing conservative leadership of Germany, the Netherlands etc. is that their strength, and by extension that of the European imperialist project, is not diluted by the weak European nations and that the Euro remain in position as a world currency and not a vehicle for default and certainly not by what is considered an advanced nation. Greece must be bled dry in order that the Euro remains strong and the pretensions of the EU remain in place.
The vision of a united Europe is not being abandoned by Germany etc, but it is one in which austerity is the bond that unites. It can be claimed that austerity will be inflicted on German workers if crisis hits the German banks; except of course that Germany has broken the rules before and would do so again. It is easier to be ideologically blind when the price is paid by someone else.
Could it have worked out differently? Syriza had hoped that enlightened self-interest would have combined with pressure from the US and the legitimacy gained by the referendum to mitigate the demands for austerity by Germany, The Netherlands and all the other little right-wing led states that curry favour with the powerful. They have been rudely disabused of their illusions.
The more fundamental reason for this outcome is the weakness of the alternative at an international level. Where were the left wing Governments calling for debt forgiveness, an alternative to austerity or even its reduction? Where were the mass movements pressurising their Governments to accede to Greek requests? Greece could not push back the demands of much stronger states on its own but on its own it was.
The demand for a revolutionary socialist alternative seeking the destruction of the Greek capitalist state and take-over of the Greek economy by its workers fails to provide any sort of immediate alternative, which is what we are discussing, for two rather obvious reasons.
Such a strategy relies on the aspiration and activity of the working class and the Greek working class neither desires nor is organised to destroy the existing state, create its own and take over the running of Greek production. The anti-capitalist ANTARSYA for example got less than 1 per cent of the vote and Syriza, it should not need to be said, is not a revolutionary party. How does a revolution arise out of this except through a long and painful process of learning lessons and making advances on this basis?
I was recently reading an article entitled ‘Marxism and Actually Existing Socialism’ written, what seems like a long time ago, before the collapse of the Soviet Union, and which defended Marx’s theory and politics. In it the author wrote that:
“Marx envisaged that socialism would come first in the most advanced industrial societies of Europe, and it has not done so. Arguably, however, Marxism is capable of comprehending this fact. In any case, this is a matter of detail, even if an important one; and it seems difficult to resist the conclusion that, in its broad and general outlines, Marx’s account of the historical tendencies of capitalism has been remarkably confirmed by historical events.”
But of course the coming of socialist revolution not to the most advanced countries is not a detail, not even an important one. It has been fundamental to the development and future possibility of socialism and has led to the very definition of socialism being distorted and disfigured.
Socialism is not possible in Greece alone any more, and certainly less, than it was in Russia not least because it is too weak and poor. It is obvious that no other working class within any other country in Europe is at a stage of development where it could either join or support working class rule in Greece.
This does not mean Syriza should not have taken office or that it should not have engaged in negotiations with the Troika. Its strength however derives fundamentally from the class consciousness and organisation of the working class and not from any superior moral position. The building of an international European party of the working class, of a militant current within the working class movement including trade unions, and of international workers’ cooperatives is the only road to creating the foundations for a successful conquest of political power.
On the other hand capitalist economic and political crises and socialist propaganda are, respectively, simply the occasion for such a conquest and the means of spreading word of the need for it.
As I have said before: the worst result would be Syriza implementing austerity. It should now reject the bailout, call fresh elections on such a platform and if elected pursue an alternative. If in opposition it should develop a movement as set out above.
The alternative it should pursue is that which the Irish should have carried out in 2008. Let the banks go bust and let its owners and lenders take part in a ‘bail-in’ in which they pay the price for their investment in insolvent companies. This is sometimes known as capitalism.
A radical Greek Government would encourage Greek workers to turn the banks into cooperatives that would shed their bad debts into a ‘bad bank’ (like NAMA in Ireland, in theory if not in its practice) and guarantee deposits that would fund development of worker owned enterprise.
The Greek debt would thereby suffer default and the reactionary gamblers Merkel, Juncker, Schäuble, Draghi and Dijsselbloem would see where the chips fall.
The blogger Boffy has suggested that a solution to the currency problem would involve electronic Euros that would allow circulation of money without the requirements for additional notes etc. from Brussels. While this could work for the domestic economy I cannot see how it could function as a means of payment for international trade and, while Greece is a relatively closed economy, it cannot function without it.
In any case the leadership of the EU would, on current form, expel Greece from the Euro and introduce its own capital controls on the country.
Greece would be forced into issuing a new currency, a new Drachma, which the people do not want. This could not be done quickly or without significant disruption. It has been asserted that the argument that this would result in devaluation and a massive reduction in Greek living standards is false because the catastrophe predicted has already happened. ‘Internal devaluation’ has already achieved what external devaluation of the new currency would otherwise have done.
I am not convinced by this argument but this too might be academic if the EU decided that Greece would no longer be part of the Euro.
The strategy suggested therefore provides no guarantee of success. There is no ‘technical’ solution or answer in this sense. And why should one be expected?
I have said that socialist revolution depends on the prior creation of a working class power consisting of an international party, international trade union action and development of workers’ cooperatives on an extensive scale. What on earth could substitute itself for these?
What is suggested is a strategy for struggle and not a ‘solution’ but we have reached the stage where not even the leaders of the EU can present false promises on this with any credibility. Austerity will continue not to work. Struggle is what we have.
Sráid Marx 
The perspective I held just before the referendum was certainly that I thought it would be lost to the benefit of the neo liberal right. I thought there was something very suspicious about a left wing government calling one so soon after winning an election on a platform of ending what had been going on for years. I smelt a rat. It turns out that the leadership of Syriza expected not to win the referendum. This is what Varoufakis is indicating without saying it explicitly.
They were surprised by the outcome and so was I. This could only mean that the political crisis had more or less caught up with the economic crisis. As you know it normally lags behind the economic crisis.
What I think is that a hell of a lot of people drawn from all the social classes have had enough. Their fighting instinct has kicked in. The words I hear over and over again are humiliation, bullying, pride and dishonour. This is the language of people who feel there is nothing else to do but to stand up and fight. I have knowledge of this from observing the nationalist youth of Belfast over the years. They had little in the way of sophisticated political analysis but they had an instinct for the fight.
An instinct for the fight seems to be present in parts of Greek society that I did not think was present a few weeks ago. It is true this is instinct for the fight is not what Marxists mean by class political consciousness. And it is not a recipe for a socialist programme. But if it is present then Marxists need to make the most of it. If they don’t some other unprincipled political formation will. The truth is , the instinct for the fight is badly lacking in the workers movement in Britain and Ireland. The one thing I do agree with you on is that the crisis on the Left in Ireland is not one of representation but of combat. There are a lot of sophisticated people in positions of leadership who do not want to be on the battle field of class struggle.
So I think the task at hand is not to solve Greece’s economic crisis, this will certainly take years. Rather it is to add some political organisation and direction on to the instinct to fight. I believe that you are thinking too far ahead, overly concerned with what socialism should be in the future, and not really catching the fire of the present. I am told that there is a powerful instinct in humans called fight or flight, we only come to this in moments of felt danger to ourselves. This could well be a moment of danger for the Greek working class.I am too far away from the scene to know for sure that this moment has come to Greece but it feels that way now and it didn’t a few weeks back.
Just came upon an interview with Yanis Varoufakis with an Australian radio channel http://www.abc.net.au/radio It confirms that the referendum was a political fraud. Tsipras and his colleagues were depressed about the positive outcome while he was jubilant. He believed that it vindicated the stance he had taken in not capitulating. Be prepared to be gob smacked.
A moment’s reflection on your comment before posting should have made you aware that the referendum cannot be dismissed simply as “a political fraud.” Varoufakis obviously didn’t think so. The referendum has undermined the legitimacy of the third austerity bailout and weakened also the legitimacy of those inside Greece who now wish to implement it. By the same token it strengthens the argument of those fighting it. Is this not obvious?
It’s an interesting interview the link to which is here
I don’t like this article it smacks of out and out political defeatism before a single shot has even been fired. You speak of Alex Tsipras as being tortured by what is he is been forced to do by the Troika. Ramsay MacDonald was tortured too when he spilt the British Labour party in August 1931 to form a national unity government with the conservatives and liberals to impose the austerity demanded by the financial markets of the time. But who cared about his belated regrets.
The referendum was a complete fraud as I said at the time it was announced. It was only intended to raise Tsipras up to a Presidential status all the more to bring his own left wing into line. And it worked, the Left Platform that was gaining control over Syriza buckled and failed to organize the potential opposition when confronted with the media focus and on the charismatic leader Tsipras. It remains to be seen if they are smart enough to organise a fight back against the right social democrats who support and advice Tsipras. It also remains to be seen if Tsipras has the mettle for the next period of imposing all of the tough austerity on the Greek workers and mass unemployed.
It should be pointed out that Syriza does not have a history of garnering support from the industrial workers. That privilege rests with the Communist Party of Greece KKE. The main active base of support for Syriza is from within the teaching profession.
You mention Antarsya only holding about 1 percent of the vote, that can change very quickly, Syriza only had 3 per cent of the vote before the election in late 2012. The real problem is that the membership number is small, about 400. There are a bewildering number of parties and factions who say they are opposed to the present deal including the Communists and Anarchists, combined they make up tens of thousands of militants. The problem is that there is no agreed strategy for what to do next.
I would advise three things. The entire anti austerity Left must agree that Greece should prepare the ground for leaving the Euro currency with a view to reinstating their own national currency. All the suggestions made about electronic currencies, digital currencies, parallel currencies etc are all too clever by half. Political leadership requires that the masses actually understand what is being done and only a tiny few understand that stuff. The central bank and main banks will have course to come under real democratic control.
A workers parliament needs to be set up to act as a beehive for all of those who are genuinely committed to opposing the austerity. Standing outside the bourgeois parliament waiting for the latest manoeuvre is hopeless and demoralising. The workers parliament may not yet have Executive Powers but it may yet win them depending on the idiocy that comes out of the bourgeois parliament. We don’t need to bother with organising another election to set this up. It is to pull together militants not to confer legitimacy.
They should already be doing what Connolly and others did in Ireland after the great lockout, forming a Citizens Army. They are going to need armed fighters sooner or later.
No Surrender to the Troika!
The first sentence of your comment states that “I don’t like this article it smacks of out and out political defeatism before a single shot has even been fired.”
But who posted this comment just two weeks ago?
“What else do they (Syriza) expect from the people after a week long of rumours, fear and panic than a vote for a reluctant yes to more austerity? Most people will likely opt for the devil they do know than the devil they don’t. The crazy political non-leadership shown by them will probably demoralise the entire broad left right across Europe for years to come. So we will end up with even more austerity government than we hoped for or maybe even expected.”
And how can you possibly say that anyone’s position exists “before a shot has been fired? That’ll be news to the Greek people who have spent years struggling against austerity before this ‘first shot’.
You say that for Tsipras the referendum was “to bring his own left wing into line. And it worked” yet it is reported in today’s Guardian that 107 out of 201 Syriza central committee members published a declaration condemning Tsipras’ agreement with Eurozone. This is but one indication that a defeatist approach is certainly not warranted but I struggle to find in your post any evidence from you that this should not be the case.
You then go on to argue the following:
“You mention Antarsya only holding about 1 percent of the vote, that can change very quickly, Syriza only had 3 per cent of the vote before the election in late 2012.”
This is very true but the point I am trying to make is that while it is perfectly possible to vote against austerity, as the Greek people did in electing Syriza and rejecting the EU austerity proposals in the referendum, this has proved not to be enough and replacing Syriza with ANTARSYA would not prove this wrong.
Creating the grounds for a real revolutionary break with capitalism is in my view a task that will take much longer, as any careful reading of the many posts in this blog will illustrate.
Creating the conditions in which the international working class can pose a living and breathing threat to the continued existence of the capitalist system requires this working class to develop its class consciousness way beyond its current limitations. As a Marxist I believe that for this there must be a material basis for such a deep and enduring change in the consciousness of millions of people and this is not the creation of a few months or even years of capitalist crisis and socialist propaganda.
Social revolution, the entire recreation of the fundamental structure and working of a complex society, and not just electing charismatic personalities promising to make things better for you on your behalf, is a historic undertaking. Hence my comment in the post – “How does a revolution arise . . . except through a long and painful process of learning lessons and making advances on this basis?”
Your tactical proposal for a left ‘parliament’ may have merit although I think it is wrongly described and weakly argued but it’s not good enough to disparage discussion of possible currency options (which have also a very political purpose) by calling them “too clever by half” while calling for Greece to “prepare the ground for leaving the Euro currency with a view to reinstating their own national currency.” The purpose of such a retreat and its consequences are what exactly?
I agree that Greek workers would be well advised to learn the lesson that they must build up their capacity to defend themselves from the state and also from the fascists but in the absence of a social and political strategy it is adventurism to propose creation of an army (if this is indeed what you propose). Ireland has a long, bloody and demoralising history of fascination with rebellion by the gun which involves neither social revolution nor success.
Once more I agree with your argument here. Just to be clear, my argument about electronic Euros, has nothing to do with creating a parallel currency, and so on, as others have suggested. It is to continue using existing Euros. The whole point about these electronic Euros, is no different to the way people in the Eurozone already use electronic Euros, just as people in Britain use electronic pounds, in the US electronic dollars.
In other words, in your bank account, the bank does not keep somewhere a pile of Euros, Dollars, Pounds etc, specifically allocated to you or anyone else. It keeps a few notes and coins in its cash draws, and ATM’s, for the odd occasion people nowadays need to use them. But, today when I make a payment I simply use a debit card, or credit card, just as in the past I might have used a cheque. No notes and coins enter the process.
Similarly, the funds in my account, from which these payments are made previously only existed as a written, and then typed entry into the banks ledgers. When a payment was made, a written or typed entry was made in the banks ledgers was made accordingly. Today, the difference is that those ledger entries exist on a computer accounting system.
All the proposal for using electronic Euros amounts to, is to encourage everyone to use debit or credit cards, or other forms of electronic payments, so that the need for actual notes and coins to make transactions disappears. As Marx notes, when businesses began to use Bills of Exchange and other forms of commercial credit, the demand for actual precious metal coinage declined significantly. It is only the same thing here.
Moreover, banks create electronic Euros all the time, just as they create electronic pounds and dollars. When a deposit is made into a bank, the bank only has to retain 10% of the deposit. They can lend out the rest. They do that by creating a deposit in the account of the borrower. Once again, this is purely an electronic book transaction. The process is what is called the credit multiplier. It means that the bank can itself create money just by creating credit. In this case suppose a deposit of €1,000 is made, the bank creates €10,000 of credit money.
Moreover with Quantitative Easing, the central bank on a large scale creates electronic money. It buys bonds and securities from commercial banks, and puts an electronic deposit in the banks account.
The only thing different in what I am proposing here is that if the ECB was to “exclude” Greece from the Eurozone – which really means that the ECB stops providing it with notes and coins and so on – then it also releases Greece from the rules under which those banks have to operate, i.e. what bonds and so on they can accept as collateral.
At the moment, the Greek Central Bank cannot accept Greek government bonds as collateral, in the way that say the Bank of England accepts UK government bonds as collateral. But, once outside the ECB’s control, the Greek government could simply instruct the Greek Central Bank to accept its bonds, and thereby the Greek Central Bank would then create an electronic deposit in the government’s account, in the same way that happens in every other economy. The government could then use those funds to pay for its activities.
The issue, as always comes down to the quantity of this currency that is created. If too much is created, then it will chase after the limited goods and services circulating within the Greek economy, and thereby cause inflation. But, given the huge underemployment of resources, and scope for an increase in internal economic activity, once austerity was ended, that is unlikely.
But, as Greeks would buy imported goods with Euros from their bank accounts that to the external supplier would appear like any other Euro, the likelihood of an inflation of import prices is also excluded, because any increase in Greek Euro money printing would be negligible compared to the total Euro money supply.
That is not the case, were Greece to go to the Drachma. Foreigners would automatically devalue this currency, so that the price of imports went through the roof, and became impossible for Greeks to buy. That would be different to the current situation where they cannot buy those goods, because they lack funds. Today they lack funds, because the ordinary Greek worker doesn’t have a job, many Greek businesses cannot produce efficiently to export, to obtain capital.
Instead, it would be the case that Greek businesses might be exporting large amounts of commodities, and getting large amounts of Drachmas, for them, the average worker could be working all hours of the day, and getting large amounts of Drachmas in wages. The trouble is that those Drachmas would be so worthless, that when converted to Euros, they bought nothing. That is one reason that the options for autarchy, whether under capitalism, or as an attempt at building “Socialism In One Country”, are reactionary, and always end in disaster.
But, you are also right about those ultra lefts who think that everything can just be resolved by more militancy, that any failure is due to betrayal by leaders and so on. I wrote a long time ago, that such elements were leading to disaster, in presenting things as though, a crisis in Greece that led to a left-wing government would be a beacon for the socialist revolution, because in the end political leadership cannot change economic laws.
Those who argue that a more militant struggle could resolve the problem of the Greek workers are deluded, because no such struggle can change the reality that Greece is a poor country that lacks capital, whose industries are small, and which lack competitiveness. Misleading the workers into thinking that a rrrevolutionary government in Athens could change any of that is just, the theory of Socialism In One Country in different garb.
Socialism is only possible on a European at minimum level, and its clear that currently the required level of class consciousness does not exist, in Greece, let alone across Europe, for a socialist transformation. Lenin only proposed the revolution in Russia, because he (wrongly as it turned out), believed that revolutions were literally imminently going to break out across Europe, and it was only a matter of holding out for a short time until they came to the rescue.
No such prospect exists today, and so the idea of building socialism in Greece is a dangerous fantasy. You are right, in the meantime, we have to do the less romantic and glamorous work of building alternative worker owned forms of property, so as to change the material conditions under which workers exist, so as to fundamentally change the basis of their class consciousness – as well as materially strengthening their economic and social position.
If such forms existed in Greece, it would have been in a far better position to deal with the current situation, in fact, it could have presented great opportunities for workers to buy up on the cheap capitalist property. In, Britain for example, at the start of the last century, the Co-op was able to use its resources and expertise, to work with the London Trades Councils in the London Food Vigilance Committees to monitor attempts at profiteering by private traders. The Co-op also used its resources and networks to support workers during the transport strikes of 1920, and did the same thing to support workers by the provision of food and financing during the General Strike, on a very large scale.
Had the TUC had a different leadership they might have seen this as a great opportunity to build worker owned property. Instead, they insisted that this same Co-op missed that opportunity by itself closing its stores, which given that the Co-op insisted its workers were members of unions, ended up affecting it worse than private non-union stores.
You can imagine that some of those today who fetishise strikes and more militancy, and a will to fight over political strategy would insist on the same idiotic approach now.
“The blogger Boffy has suggested that a solution to the currency problem would involve electronic Euros that would allow circulation of money without the requirements for additional notes etc. from Brussels. While this could work for the domestic economy I cannot see how it could function as a means of payment for international trade and, while Greece is a relatively closed economy, it cannot function without it.”
I agree with all of this, including the point about how electronic currency can work internally, but not necessarily externally. In fact, I made that that point myself.
Syriza is a social-democratic party, but one more like the Labour Party of the 1920’s and 30’s, which had large community based grass roots. I don’t know enough about the situation on the ground, but it seems to me that the main weakness has been that it has concentrated too much on the high level negotiations, and not enough on getting those grass roots to build worker owned alternative structures on the ground in Greece. For example, co-operatives have, as they always do, sprung up spontaneously, as workers found their own, means of resolving immediate problems. But, I’m not aware that Syriza has done anything, from the top down, to support this development from the bottom up, to paraphrase Lenin’s approach.
For example, Paul Mason has described the crazy situation in Greece in relation to pharmacy ownership, which prevents the creation of larger companies, and the benefits of economies of scale. I suggested some months ago, that this would seem a perfect example of where, even using the typical model of peasant co-operatives in southern Europe, the individual owners could have been organised into some kind of co-operative structure that could, in the first instance of left them with their individual ownership, but enabled them to obtain the benefits of economies of scale in purchasing, in administration and so on.
As I’ve described in the blog post you referenced, the issue of lack of money, is really only a lack of currency – that is means of circulation or payment, which Marx describes as notes and coins, and credit money, but which today includes all the various forms of electronic money, such as debit cards, ApplePay, and so on, as well as direct debits, and electronic transfers.
Part of the problem in Greece, seems to be that unlike, even in large parts of developing Africa, where they have skipped a stage, and moved on a large scale to replace paper money, by payment systems based on mobile phones etc., Greece has very backward monetary payment systems. So, large numbers of people have been reliant on actually obtaining notes and coins, a situation that is crucifying, when a credit crunch develops, and particularly where some businesses may be deliberately hoarding cash to cause a crisis that brings down the government.
Syriza should have been using its grass roots organisation to deal with those situations. You might need your upper cadres to be doing the diplomatic negotiating, but your grass roots cardres should be doing the basic groundwork of building those alternative structures of economy and power. That is a lesson that other social-democrats should be learning now. A series of co-operative banks, credit unions, the extension of the use of electronic forms of payment, and community based means of organising collective payments and so on, could have pulled the sting of much of the credit crunch imposed on Greece by the ECB. It would have meant they could have let the capitalist banks go bust, which would have focussed the attention of the international money lenders. After all, the EU Commission report has now admitted that the ESM bailout is required to prevent the Greek banks going bust, because they WOULD have caused contagion across Europe!
On the use of electronic Euros for international payments, its possible they could work. In fact, that’s basically how international payments work nowadays anyway. Its only a book keeping transaction amongst international banks. The real issue is as it always has been, are there funds in the account? That comes down to a question not of money, but of capital.
The EU/ECB could not unilaterally stop Greece continuing to use Euros. Some Latin American countries, for example, use dollars, but are not part of a dollar currency union, Scotland could have continued using pounds – though not printing them physically – whether the rest of the UK agreed or not, Zimbabwe used dollars as a means of controlling its hyper inflation. The question, here is if a Greek company A wants to buy commodities from Italian company B, with a cost of €1,000, does company A have €1,000 in its account? If so, there is no reason the transaction cannot take place. But, for company A to have €1,000 in its account, it must have produced and sold commodities, or raised money-capital. For the total of Greek companies, or others seeking to import commodities, it requires that they have exported commodities to be able to pay for them, or else that it is able to export money-capital in exchange.
In reality, that would be easier to achieve, if the Greek economy was growing, because those companies would be accruing capital, from making surplus value within the domestic economy, and that would provide the capital required to pay for the imports. Austerity, has undermined that potential, by cratering the economy.
Moreover, that illustrates the problem. Whether Greece were to use the Drachma or continue to use the Euro as at present, it can only import what it requires if it either pays for them with exports, or has the capital to transfer to cover it. The reality, is that it cannot currently pay for imports of drugs and so on, even using Euro notes and coins, even being inside the Eurozone, because it simply lacks capital to be able to pay for them, and its economy has been so decimated by austerity, that it now lacks the capacity even to export on a sufficient scale to cover even vital imports.
Should Syriza have taken office? In my opinion yes, because it showed that there is a third alternative to either accepting austerity or leaving the Euro. Its to stay and fight for a different structure. I’ve described it as being like someone who complains about their wages being told their only options are to accept it and stop moaning or to get another job. Instead, theere is the third option of organising a union, and fighting for better wages.
Is that guaranteed to succeed? Absolutely not. As Marx and Engels point out, the majority of wage struggle fail, and only ever in the long run win pay rises that maintain wages at the value of labour-power. But, workers have to wage those struggles, if they are to move on to some real alternative, and not simply sink into apathy. As Engels put it,
“The history of these Unions is a long series of defeats of the working-men, interrupted by a few isolated victories. All these efforts naturally cannot alter the economic law according to which wages are determined by the relation between supply and demand in the labour market. Hence the Unions remain powerless against all great forces which influence this relation. In a commercial crisis the Union itself must reduce wages or dissolve wholly; and in a time of considerable increase in the demand for labour, it cannot fix the rate of wages higher than would be reached spontaneously by the competition of the capitalists among themselves.”
(The Condition of the Working Class)
It may be thought that Engels comment about the Trades Unions “must reduce wages or dissolve wholly” reflects the position that Syriza faces today. Maybe. Engels point was that its sometimes better for a union to negotiate a pay cut, and keep the majority of its members in a job, so as to fight another day, than to allow its membership to be divided by job losses, and competition for remaining jobs. But, I’d suggest today that the position Syriza is being put in, is more like asking the shop steward to also take on the role of foreman and production manager.
Sometimes, there may even be reasons to do that, depending upon how well organised the workforce, and how confident the membership is in the steward. More frequently it ends up as company unionism. I think Syriza, or at least socialist MP’s within its ranks have to oppose this deal, and continue to build alternatives to capitalist property within their communities. They need to continue to offer the vision of an alternative to those like Podemos, who can be real allies, and thereby to pressure the existing social democratic parties.
Today, I heard the Podemos economic spokesman say the situation in Spain is different, because the real debt in Spain is private debt, it is debt held by the banks, based upon still massively inflated property values. As he said, if Spanish citizens were able to walk away from their properties and leave the debt with the bank, as they can in the US, then many more would have done so, Spanish property prices would have fallen through the floor, and the Spanish banks, along with the rest of the EU banks would have gone into meltdown. But, in reality, its not really that different. Private sector debt in Greece, is larger than the public, and more intractable, because its held by other private sector bodies and individuals across Europe. Nothing so far proposed deals with it, and sooner or later, as the IMF recognises, its just going to default.