Nationalist answers 2 – Greece

Greece imagesIn the last post I noted that one view on the Left in Scotland was that it was not possible to call for a vote or support for a reformist SNP because, through being reformist, it could not face down the intransigence of international capitalism when it tried to introduce reforms.

This would seem to be confirmed by the experience in Greece in which a reformist formation Syriza has just performed a humiliating U-turn and supported a third bailout that will impose greater austerity than that which it had previously opposed.

One of the many evaluations of this experience is here, which is also written by someone from the SWP tradition and which is based on the same political assumptions.  Unlike Davidson, who claims that the distinctions between reformists, revolutionaries and centrists are only understood by a relatively few revolutionaries, Kieran Allan argues that understanding such distinctions is vital:

“Ever since the crash of 2008, there has been an increasing call among activists to forget ‘old’ debates about reform or revolution. Yet the betrayal of Syriza re-opens this very question.”

One line of argument in response might be that Kieran Allen doesn’t actually advance a revolutionary programme himself – the SWP in Ireland doesn’t stand candidates in elections under a revolutionary banner but consistently stands as part of alliances that exclude it.  His definition of reformism applies equally to the various electoral projects of the left in Ireland over the past number of years:

“Despite opposing neoliberalism, Syriza embraced a reformist strategy. The term ‘reformism’ is not meant as one of abuse but it describes a strategy of using the mechanisms of the state to effect substantial changes on behalf of working people. It operates within the framework of capitalism and uses Keynesian economics to increase demand – rather than proposing the outright expropriation of capital.”

His criticism of Syriza can be made just as cogently against the United Left Alliance, People before Profit or Anti-Austerity Alliance:

“Some object to describing Syriza as a reformist because a) it leaders used a rhetoric about moving beyond capitalism and b) because there were avowed anti-capitalists elements within its coalition. However, this objection is somewhat facile as it was only in Bad Gotesberg programme in 1959 that the German SDP dropped their formal adherence to Marxism. In the early twentieth century many reformist parties combined a rhetoric about moving beyond capitalism as their maximum programme with a practice of seeking social reforms as their minimum programme.”

While he criticises the view “of democratising the apparatus of the capitalist state, transforming it into a valid tool for constructing a socialist society, without needing to destroy it radically by force’,” this is the alternative put forward by all these left alliances in Ireland.

This is certainly a problem but not the one I want to address here.  The latter is the problem of the strategy Allen puts forward as the alternative to Syriza’s reformism, not the similarity of this reformism to the SWP’s actual political practice.

Allen criticises “Syriza’s strategy of working exclusively through the state and through negotiations with the EU [which] could not match the courage of the Greek electorate.  This historic defeat, therefore, arose from a belief that control of the Greek state apparatus and appeals to EU solidarity was the method for bringing change. It never entered their heads to think about how the NO vote could be mobilised within Greece to physically face down EU efforts at blackmail. The sole agency was the Greek cabinet and its ability to negotiate with the EU bullies.”

Allen says that “they [Syriza] placed little emphasis on the role of Greek workers themselves taking action to break from capitalist control. . .  The mobilisation of workers in every area of society can stop the power of money and market forces.  Against the economic terrorism of the EU, people power and workers action is the only way to achieve change.”

When discussing lessons for Ireland he says that “In recent months there have been discussions about the need for a ‘progressive government’ in Ireland and interesting debates have occurred about policies. But there has been little talk about the methods by which such aspirations might be achieved.”

Unfortunately in reality neither does Allen, although this is the centre of his critique.  There are plenty of evocations of the need to mobilise workers to “face down the EU” but what does this mean?  What methods does he propose by which the aspirations of progressive change could be turned into reality?

What we have are calls to take action but total lack of clarity as to what action should be taken.

The first question is to identify the problem. And it’s not Syriza’s reformism.  Why is there a crisis in Greece in the first place?  Why not in Italy or Belgium – both have large debts?

The answer is well known.  Greece is relatively poor with a weak and not very productive capitalism. This makes not only Greek capitalism weak but its working class also weak, in a manner for which an increase in class struggle cannot compensate, or at least not very quickly.  This doesn’t enter Allen’s analysis.

The second question concerns the EU: “After the Greek crisis, the Irish left needs to drop any idea about the progressive nature of a social EU. It should note that Syriza was wrong to believe that it could combine an anti-austerity programme with support for the EU.  The reality is that the EU combines a soft rhetoric about ‘inclusion’, ‘solidarity’ and ‘respect for human right’ with a hard core neoliberalism that is embedded into its institutions.”

“The Irish left should, therefore, fully break with a ‘we will stick to the EU at any cost’ mentality because it was precisely this approach that gave the EU leaders a stick to beat Tsipras. Instead the left should advance its demands for a write down of debt, for nationalisation of natural resources, and a reversal of privatisation regardless of whether or not this is acceptable to the EU. It should indicate that it will not be bound by the rules of the Fiscal compact and that electoral support for the left means a mandate to defy such rules. It should make it clear that it favours the break-up of the EU in its current form and will seek its replacement by a federation of peoples based on democracy and control of capital.”

The EU is unreformable but if Allen has pretentions to Marxism he will also agree that the Greek State is also just as capitalist as the EU and also just as unreformable, yet he sees it as part of the solution through “a write down of debt, for nationalisation of natural resources, and a reversal of privatisation.”  Why would a capitalist Greece do this?  Is this not precisely the reformist approach that Allen excoriated earlier in his article? Or if an unreformable Greek state could do it why not a similarly unreformable EU?

He says that “Most modern European states are embedded in a network of EU institutions and so a strategy of working through the state also means working within those institutions. Syriza leaders correctly assumed that in an era of globalisation, there could be no purely national solutions to the crisis within capitalism.”

Yet in the proposals he advocates where is the recognition and incorporation of this impossibility of a “purely national solution”?

What we have in fact is the very opposite.  He proposes “A break from the euro [which] would have to be accompanied by a major programme to re-distribute wealth so that the costs of the change fall on those who can most afford it.”  But this is just the reformist programme he criticises while acknowledging that a new national currency cannot by itself be a solution. Yet a new national currency plus redistribution of wealth wouldn’t do it either.

Allen is right that any left Government “should [not] pretend that a different currency –such as the punt- can in itself solve problems. . . .  the key issue is not the currency but control of the economy.”  The problem, as we have seen above, is first that this economy is weak and second that the answer provided by Allen is always action by the state or rather by the national state, not internationally by the EU.

The nationalism that infects all inherently reformist projects appears explicitly in Allen’s perspective not just in rejection of the Euro or in rejection of the EU but in his support for “the break-up of the EU in its current form and . . . its replacement by a federation of peoples based on democracy and control of capital.”

This is something he “will seek” but as a policy it has no practical worth or educational propagandist value.  It simply states that a return to nation states and an end to capitalism is the answer and while the second is right and the first is wrong neither amounts to even the start of a strategy and adds nothing to any discussion of it.

This national road to socialism is made explicit in his statement that “it is possible to organise an advanced economy without a permanent need for substantial credit transfers. Ireland already has a high level of wealth but, unfortunately, its control lies in a few hands. Re-distribution of that wealth provides an alternative avenue to seeking ‘support’ from foreign creditors. Such a strategy does not preclude individual arrangements to access credit . Rather it suggests that a transitional economy that goes beyond capitalism would have to overwhelmingly rely on its own resources – rather than the type of EU ‘support’ that hung Greece.”

This in effect denies the international character of production from which there can be no going back and repudiates his statement that “in an era of globalisation, there could be no purely national solutions to the crisis within capitalism.” It asserts the opposite of everything that Allen professes to stand for.

He ends up arguing that “a transitional economy that goes beyond capitalism would have to overwhelmingly rely on its own resources” because the Greek crisis has not only tested and found wanting the reformism of Syriza but also exposed and found wanting the reformism within his own political conceptions based on action by the nation state.  In fact if anything, in its lack of any international perspective, it is worse than Syriza’s.

Nationalisation, redistribution of wealth and left governments astride capitalist states are not socialist solutions, even if in certain circumstances their effects can be welcomed and supported.  The example of Greece shows how one variant of such a solution can fail but the weakness of Greek capitalism placed major constraints on what could be done even if more could and still can be achieved.

Neither is nationalisation and redistribution by the state after a workers’ revolution socialism unless this state is the creation of workers themselves and not some minority party or group within it.  Freedom, as they say, is taken not given.

Socialism is the action of the immense majority of society, those who work and those rely on the wages of those who do so.  It is the actions of the working class that involve socialism.  It is not state ownership of production that is socialist but working class ownership that is socialist.  Before the political overthrow of the capitalist system and its state this must take the form of workers’ cooperatives.

The strategy of a purely political revolution, only after which comes social revolution; that is the strategy of seizing state power in advance of major gains in the economic and social power of workers achieved through workers ownership, leaves open the problem illustrated by the isolation faced by workers in the Russian revolution.

The alternative of more or less simultaneous revolutions in a number of economically advanced countries could only be conceived on the basis of a prior development of the economic and social strength and power of the working class on an international level.

This problem of isolation was and is faced by Greece but the socialism in one county approach of Kieran Allen is the wrong answer.

Seeking solutions at the level of the state in advance of the development of working class organisation at an international level provides the rationale for a programme which seeks not to advance beyond capitalist internationalism, which is what the EU is, but to regress from it mouthing fatuous phrases about international federations of peoples based on democracy and control of capital.

Nationalist answers 1 – Scotland

scoty images (11)A common analysis on much of the left is that the EU is a capitalist club that pursues an imperialist agenda, just confirmed by its brutal treatment of Greece.  The socialist answer is therefore to be in favour of leaving it.

Many of these same people argue that the UK is a capitalist state that has just re-elected a Tory Government committed to further austerity.  The election has shown that it too, just like the EU, is unreformable and should be split up; so for example Scotland should separate from it.

The answer to both is therefore a nationalist one.  Let’s not be distracted by the bells and whistles attached.  The objective is a change in the nature of the state but in both cases this means a return to the nation state, a smaller state, is the answer.

Ironically, as a recent post I read noted, while the treatment of Greece by the EU in the name of austerity has been acknowledged by more or less everyone to be brutal, the reaction of some nationalists has been much more muted.

Thus the SNP who are portrayed as opponents of austerity have rallied much of the British left around its nationalist argument for separation on the basis of its opposition to UK austerity.  It argues that any move to get out of the EU will see it demand a new indy referendum so Scotland can stay in.  Yet the austerity inflicted by the EU on Greece is of a magnitude many times greater than that directed from London.

From a socialist point of view it gets worse.  Their answer to this exposure to the contradictions of nationalism is to be even more nationalist than the nationalists.  Many of them demand that the UK (or the Irish State for that matter) leave the EU.  Of course it is claimed all the new states created will not be like their old incarnations  but progressive, if not socialist, but if they were there would be no need for them to be separate and if they are separate they will be in the position all nation states are in, which is in competition with each other.

We see such competition in the proposals of the various nationalists and left nationalists to reduce corporation tax.  Sinn Fein and the left in Ireland want to keep the low 12.5% rate but want it to be the effective rate while the SNP want a lower rate than the rest of the UK, whatever it is, and the Tories have just cut it to 18 per cent, so it now has to be lower than this.  When the Tories took office with the Liberal Democrats it was 28 per cent.  If my sums are right I think this makes Sinn Fein, the Irish Left and the SNP softer on the big corporations than Tony Blair.  But this doesn’t fit the narrative so let’s stick with it.

In an earlier post I promised I would look at an article notified to me by a friend, on the Left’s attitude to the SNP, just before the UK General Election so I’ll do that here.  I’ll also look in a second part at one of the many responses on the Left seeking to learn the lessons from the Syriza U-turn in Greece.  What they have in common is an accommodation to nationalism.

What they also have in common is being written from the Socialist Workers Party tradition.  As I noted before, this tradition, through their forerunner of the International Socialists, used to have much better positions on both the EU and Scottish nationalism.  However the two articles show that accommodation has not yet become capitulation.

The article in ‘Jacobin’ is in the form of an interview and it is revelatory that the first question doesn’t ask the interviewee why he supported Yes in the independence referendum but “what did you see in the movement that made it worthy of support?”

As I noted during the campaign, many on the left voted yes because they liked the campaign for it rather than any very compelling reasons for having a campaign for such an objective in the first place.

In this sense they were guilty of what Marx warned against – “Just as one does not judge an individual by what he thinks about himself, so one cannot judge such a period of transformation by its consciousness, but, on the contrary, this consciousness must be explained from the contradictions of material life. . “  Instead the Left supported a nationalist campaign, driven by social and economic concerns and desire for an alternative, and having done so declared it left wing.  It looked at itself in the mirror and liked what it saw.

Just like Sinn Fein in Ireland it does a grand job at telling itself and anyone else who will listen how great it is.  It might be something about nationalism.

I am also reminded by another less glorious figure in the history of the socialist movement who once declared “the movement means everything for me and . . . what is usually called “the final aim of socialism” is nothing.”

I exaggerate?  Well let’s look at the interview.  Davidson gives three reasons for changing his view to now supporting independence and, in his own words, he says that “the most important change was simply the nature of the campaign itself”

He says that “for many people it wasn’t about nationalism of any sort”. .  “It was about how to realise various social goals: an end to austerity, the removal of nuclear weapons, defence of the National Health Service”.  The fact that the answer to each of these problems is nationalism seems not to make the movement for it nationalist.

That the problems are not nationalist ones appears to mean that when the solution is national separation (“independence will improve their [workers’} situation immediately”) we don’t have to call it a nationalist solution.   Ironically if the problems were nationalist ones (like national oppression for example) a nationalist response might make more sense.

This self-regard leads to an exaggerated view of the role of the Left in the independence campaign, which, he says, dramatically changed its dynamic and drove the entire discussion of independence to the left.

In fact the landslide for the SNP in Scotland in the General election showed just who drove the campaign, who put independence on the agenda for decades before and who then benefited.

That the campaign for independence won the support of many working class people for a party Davidson admits is “on the extreme left of what I call “social neoliberalism” and “which broadly supports the neoliberal economic settlement”, i.e. austerity, is such an admission that it is simply staggering.

He supported separation because of the independence referendum campaign that led a neoliberal party to a landslide on the basis of that party claiming to lead opposition to austerity!

Davidson goes on to say that the SNP has moved to the left in economic terms “above all in rejection of austerity” and “is offering reforms” but also says they took up their “social democratic” position “in order to win votes” because “it would have been difficult to compete with New labour from the right”.

He accepts as good coin SNP claims of opposing austerity but fails utterly to examine its actual record in the Scottish Government, which would blow such claims out of the water.  Such an examination doesn’t fit the narrative.

In fact this narrative clashes obviously with reality.

He claims that the SNP sought an alliance with the Labour Party against the Tories, when in reality their strategy depended on destroying Labour in Scotland and keeping it to their right everywhere else.  Does he think the SNP would welcome a Jeremy Corbyn victory in the Labour leadership contest?

Why would it, since this would immediately demonstrate the efficacy of fighting together, that the Labour Party was not quite a dead loss and that there did actually exist a labour movement undivided by nationality.

He congratulates the SNP on their honesty, they’ll  never do a deal with the Tories he says, which means we can forget the one it had with them when in a minority administration in 2007 reliant on Tory support.

By supporting separation the pro-nationalist left has already separated itself from wider struggles.  In so far as there is a fight about austerity and its alternative in Britain today it is centred around the Corbyn campaign for leadership of the Labour Party.  I wondered on this blog whether the British Left would be part of it.  Were the unthinkable to happen and Corbyn actually win it could hardly be ignored.  Would an all-British movement against austerity in such circumstances be better than a purely Scottish one or would the Left insist on introducing national divisions where none were necessary?

It would appear that Davidson would answer the latter in the negative. “We must not give up the question of independence.  Unless a revolutionary situation emerges in England . . .”.  And of course Corbyn is far from being a revolutionary.

So it looks like English workers will have to deliver a revolutionary situation in England before the Scottish Left will be interested in political unity within one state.  (Talk about playing hard to get!) Not, mind you, that they are steaming ahead in the creation of a revolutionary party themselves because, Davidson says, “we are not in a position in Scotland to immediately set up a revolutionary party.”

Of course there are the ritualistic claims of wanting “solidarity” with English workers against the British State but not solidarity with English workers against a Scottish capitalist state which would replace the British one lording it over them come separation.  Joining with English workers to overthrow the Scottish state?  Now that really doesn’t fit the narrative.

Instead solidarity with English workers will mean we’ll demand the removal of Trident, which means moving these weapons to . . . err, England maybe?

And if the English follow this example and say that we’ll take the same position as you in Scotland and demand they’re not sited in our country, they can stay. . .err, in Scotland maybe?

What a splendid recipe for solidarity!

I mentioned that Davidson has accommodated to nationalism but not capitulated.  This is because although the article asks the question how the Left should relate to the SNP in advance of the General election he nowhere calls for a vote for the SNP.  The problem is, given what he says, I can’t see the reason for him not to.  Why not? given that he claims it opposes austerity, wants to introduce reforms, has moved to the Left and is now full of left-wing working class people who are ‘consolidating’ its position there.

It would be some slight comfort if it could be hoped that the reason for this is that, as a relatively recent convert to Scottish nationalism, at some level he just doesn’t quite believe his own argument.

Unfortunately the real reason may well be political sectarianism.  His reason appears to be that an SNP Government bent on reforms would face pressure and intransigence from capitalism when it would try to introduce its reforms.

He doesn’t say how this would not be the case in any other circumstance.  He doesn’t say how, what he might call a revolutionary party, would not face the same if not greater pressure.  He doesn’t say how it should be dealt with.  He doesn’t say why nationalist division prepares workers for such international capitalist intransigence and he does not say why this means that denial of support to the SNP now is justified by a future need for a revolutionary break, especially when he says the alternative party to be built now must not be revolutionary.  So how does he prepare all those inside and outside the SNP who must be prepared for this revolutionary break?

But what’s wrong with all this is not that Davidson should follow through on the implications of his analysis of the SNP and join it, but that his view of what is required of revolutionary politics now leads to a nationalist blind alley of supporting nationalist separatism now and being just as exposed to nationalist limitations when the grand day of revolutionary rupture might break out in the future.

His argument for national separation and endorsement of the SNP demand for independence falls apart because he refuses to support that party on the grounds that when it will be faced with international capitalist pressure it will be in no position to resist, most importantly because the working class will be divided by nationality whilst the capitalists won’t.

A convincing narrative or what?

Greece Crucified

ws jimagesAlexis 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.

 

Some comments on the Greek referendum

Greece3543The decision of the Syriza Government to call a referendum on the proposed austerity proposals of the Troika (European Commission, European Central Bank and IMF) in return for another ‘bailout’ programme reminds me of the Irish austerity referendum three years ago.  It gave rise to one of the first posts on this blog.

The Irish people voted by a large majority to support austerity.  Will the Greeks do the same?

The Irish voted reluctantly to accept austerity (how else could you do so?) because there was no alternative at hand.   The arguments of the Left that the Irish State could lead a growth agenda of Keynesian stimulus hardly convinced when that State had just bankrupted itself bailing out the banks.

Both the reason for the defeat and its effects have not been appreciated.  Of the latter it is enough to ponder the proposals of the trade unions behind the largest sustained opposition to the austerity agenda – the Right2Water proposals for ‘A New Fiscal Framework for a Progressive Government’, which proposes additional State expenditure of €9.4 billion over 4 years.  This would amount to less than 4.5% of the 2014 level of Government expenditure.

The Right2Water’s ‘Policy Principles for a Progressive Irish Government’ contains a section which proclaims the need for additional investment in the water and sanitation system of “between €6 and €7 billion”, which leaves just around €2.5 to €3.5 billion for education, health, investment and everything else.  This is not so much an alternative to the current Government’s strategy as a variant of it.  So much have horizons been lowered.

According to the authors of this document the rules of the EU will be adhered to while seeking flexibility within them and negotiating additional scope for spending.  But the case of Greece exposes that the rules of the EU, ECB and IMF can be bent to suit.

So the claim that joining the Euro was irrevocable has been discarded by the leading powers in the EU to be replaced as the biggest threat to the Greek Government and people – vote against our austerity plan and you are voting to leave the Euro.

The propaganda campaign by the EU leaders includes European Commission President Jean Claude Juncker, who says he feels ‘betrayed’, and complains about a lack of “good faith” and “sincerity” from the Greeks.  This from a man who presided over the building of Luxembourg into a tax haven.  Yet he sees fit to question the Greek Government and people over their right and capacity to raise taxes.  Has the tax evasion facilitated by Luxembourg not contributed to the Greek predicament?

Christine Lagarde of the IMF proclaims she wants “adults in the room” with whom to negotiate, attempting to infantilise the Greek Government representatives and by extension the Greek people.  This is the Lagarde who has been placed ‘under investigation’ in a fraud case.  One can’t help but recall the behaviour of the previous head of the IMF, Dominic Strauss-Kahn.  Getting fucked by the IMF is a pleasure for no one.

In the current case this involves Troika demands for drastic reductions in the pensions of some of the poorest Greek pensioners and increases in VAT that will hit both those who will pay increased prices and the small businesses compelled to charge them.

On the Left these demands of the Troika are likewise treated as in effect an ultimatum which should lead to exiting the Euro – as the only effective response to the unceasing demands for austerity.  What for the leaders of the EU is a threat which the Greek people should retreat from is for some on the Left a major part of the solution.  What for the former is a recipe for chaos is for the latter the way out of it.

In my view the former are correct.  Exiting the Euro would lead to a new Drachma that would involve massive devaluation and a large reduction in Greek workers’ living standards.  Cutting one’s own throat is not preferable to having someone else do it.  If Greece is thrown out of the Euro it naturally has no choice but that is not a choice it should itself make.

It is clear however that the choice at the end of the day is not Greece’s to make.  It is not in a position to compel a significant reduction in austerity or debt relief even while many commentators who support the austerity demanded admit that debt relief is inevitable.  The reason that they demand austerity nevertheless, even while recognising that it has failed, is that they seek the removal of the Syriza Government.

The EU leaders tried it last week and now seek it this week through refusing to accept Syriza’s huge concessions, refusing to extend the ‘bailout’ and through freezing ECB liquidity provision to the Greek banks.

The Greek workers should reject the austerity plan from the EU and reject the non-solution of leaving the Euro.  Only on the basis of fighting austerity and refusing a go-it-alone nationalist solution can it minimally seek to build a movement that would stem the demands for austerity.  What the Greek crisis shows is that such austerity can only be fought at an international level.

What does this mean?

Well, let’s look at what the Channel 4 journalist Paul Mason, who is covering the crisis, had to say.   Exit from the Euro may be inevitable he says because of democracy – the population of Northern Europe would not support the transfers required to reverse austerity inflicted on Greece while the Greek people may no longer accept it.

In this he is at least partly right.  Only an international campaign of solidarity with the Greek people, which explained that the bailout was not for them, but for the German and French banks and hedge funds who invested in lending to Greece, could explain the real function of austerity and lay out the grounds for convincing those outside Greece to reject it.  On this basis it might force a retreat from the austerity demanded by other EU Governments, including the repulsive Irish one.

Within Greece it would require not just an ‘OXI’ vote but a mass movement that would compel implementation of a Syriza programme to tax the oligarchs through occupations to open the books of these businesses and in doing so help put in place a rigorous system of tax collection.

In itself this would only form the starting point of a workers’ alternative – one that is based on development of worker owned production.  Such workers’ cooperatives are the alternative to the weak and crony capitalism from which Greece suffers.  It offers practical proof of the socialist alternative and is a basis for its growth this side of political revolution.  The latter in turn will gain credibility from practical demonstration of a socialist programme.

The lack of such international and domestic conditions caused defeat for Irish workers in their referendum.  A very different vote in Greece would be a step forward for Irish workers now.

On the other hand the very worst result would be defeat in the referendum and a Syriza Government implementing austerity.

While the Dutch hatchet-man Jeroen Dijsselbloem again reveals the Euro leaders agenda of getting rid of the elected Greek Government – “ who are we trusting” he says if Syriza promised to implement the austerity it had just rejected, Varoufakis is quoted as saying that Syriza would do just this.  “If the people give us a clear instruction to sign up on the institutions’ proposals, we shall do whatever it takes to do so – even if it means a reconfigured government.”

Such an approach would discredit any sort of Left alternative and pave the way for a hard right Government to eventually push through austerity on a demoralised workers’ movement.

The long resistance of Greek workers to austerity has given hope that we are not yet at such a result and that the struggle against austerity will continue.

Syriza and Ireland

syrizaimagesThis Sunday the Greek people will go to the polls in an election that could see the beginning of the end of austerity in Europe.  That anyway is the view of some on the left across Europe.

The potential election of a Coalition of the Radical Left (Syriza) Government, promising a radical reduction in the debt burden, has the potential to galvanise and set an example to the rest of the PIIGS.  It could incite a combined movement in Portugal, Ireland, Italy, Greece and Spain that would reduce the debt of these countries which has been a prime driver of austerity.  Through radically reducing the requirement to service and pay down enormous debts such a step could launch a definitive movement away from neoliberalism towards a radically different Keynesian social democratic alternative.

The elections in Greece will be followed this year by elections in Spain, in which a like-minded Podemos movement has grown, and in Portugal, and may also be joined by an election in Ireland despite the claims of the current Government that it will run in office until 2016.  Of the five PIIGS therefore at least three and possibly four may see elections this year.  Even elections in Britain could see the ousting of the Tory devotees of austerity and neoliberalism.  In fact the policy that might inspire the PIIGS is not confined to them but might apply right across Europe.  And Syriza is in the vanguard of this movement.

Is such a scenario a real possibility?

Let us notice what makes such a claim plausible.

Firstly the proposals of Syriza are not solely on behalf of the Greek people although as a Government it will be able to negotiate only on their behalf.  Syriza proposes a European Debt Conference modelled, with delicious irony, on effective debt forgiveness of (West) Germany in 1952.  This was carried out explicitly in order, or so it was claimed, to normalise relations between Germany and its creditors and to promote economic development.   That deal wrote off half of the debt, stretched repayment of the rest and for the first few years provided only for payment of interest, which was also limited.

Syriza proposals are more limited. Their policy could be based on an academic paper which proposes that half of the debt would be bought up by the European Central Bank (ECB) with either an interest holiday or interest charged on the remaining debt at a low rate.  The debt taken on by the ECB would not be written off but would be paid back only when the remaining debt left to the country had been reduced to 20 per cent of Gross Domestic Product (GDP).  In effect economic growth and inflation will have eroded the real value and real impact of debt repayment.

However in one very important sense the proposals are much more radical than the German precedent, because the Syriza proposal is that this plan applies to every country in the Eurozone with debt over 50 per cent of GDP (all but three countries).  The Irish state for example would see its debt reduced from 108 per cent of GDP to 50 per cent, saving €3.7 billion each year in interest payments, so reducing the need for cuts or tax rises and facilitating greater state spending and investment.[i]

It has been estimated that this would reduce sovereign debt in the Eurozone area by about €4.5 trillion.  It is asserted that this would not risk inflation because the ECB debt purchases would be funded by massive borrowing from private banks.  There would be no money printing since the money is borrowed.  And sure why worry about inflation when deflation is so clearly the enemy?  And who pays the interest on these loans?

Well, it is recognised that there will be losses in paying back the private banks, between €50bn – €60bn in each of the first 5 years, and €1trilion over 40 years, but it is argued that the borrowing costs of the ECB would be low and that renewed economic growth would compensate.  It would be cheaper than the current policy of austerity and expansion of the ECB balance sheet required to bail out the banks.

It is recognised that this may not be enough in the short term for some countries so that, for example, in order to prevent continued austerity in Greece the ECB would have to take over the debt that would be required to be issued in the next five years.  This would also be required because over 50% of outstanding debt has to be paid back within the next 5 years in Italy, Spain, France, Holland and Belgium and to cover this new debts would have to be taken on.

For Marxists the point is not that some monetary scheme has been devised that will solve capitalisms’ problems.  Nor is it the point that Syriza will go into negotiations and cannot expect, as in all negotiations, to get its original plan agreed, even discounting some conscious intention to betray the hopes of its supporters in order to accept the logic of capitalism.

The significance of the proposals is that it provides a concrete platform around which workers across Europe can organise and struggle together, and a series of elections that can be a focus for such struggle.  This is not to invest illusions in either elections or Syriza, who are condemned by some for having shifted from a policy of debt repudiation to one of simply extending repayment under more favourable terms.   If a practice of simply condemning the limitations of reformist politics were the answer we would no longer have the problem.

The Syriza programme is one that workers and socialists can support because it reduces the burdens they face and would deal a big political and ideological blow to austerity and the parties who have peddled it.  It would deal a real blow to reactionary political parties seeking nationalist or fascist solutions.  Through a successful campaign workers could gain strength and confidence to build up their organisations, their own social and political power and their own confidence and class consciousness.  The latter is the role that Marxists can play by advancing a programme that does all these things.

The victory of Syriza would allow an opportunity to directly organise workers on an international programme on an international basis.  It is remarkable that this significance has been somewhat missed.  So, for example, the call promoted by the Fourth International correctly argues that “their victory will be ours, but their defeat too” but appears to fail to appreciate that this can be so because other European workers will not just be in solidarity with Greek workers but can actually be part of the same struggle, demanding the same deal for their country, so that “our victory will be ours and our defeat will be ours too.”

This is made tactically easier by Syriza not proposing either to leave the Euro or leave the EU.  There can be no pretext that the demands of Syriza can be dismissed because they no longer want to belong to the club.

These policies have been condemned as examples of betrayal of earlier more radical promise but they are not just tactically recommended.  As argued before in the various posts on ‘The Left Against Europe’, the growing unity of capitalism provides the material basis for the international unity of the working class.  This is why a united international struggle against austerity is more immediately and concretely possible in the Eurozone than one against similar policies pursued more or less independently by separate capitalist states each with their own currency.

So to return to our question – is such a scenario possible?

It is possible to argue that it is, for the simple reason that the Greek debt is too big to be paid back anyway.  Some means of addressing it is required and the Syriza route is eminently preferable for workers than the slow death march of austerity and repeated minor debt ‘haircut’ so far embarked upon.

The second is that by the very fact that the Syriza plan is reformist there is no necessity for a life and death struggle by the forces of capitalism to defeat it.  The Syriza plans do not call the system into question, which both sets limits to what it can achieve but also provides scope for negotiations between a Syriza Government (and other PIIIGS Governments should they be elected or so inclined) and the IMF/ECB /EU/German State alliance.

The rallying of the Greek workers behind Syriza is one of many proofs that a revolutionary overthrow of Greek capitalism is not currently on the cards and is not therefore a realistic immediate alternative.  The revolutionary alternative today consists of preparing for such an eventuality tomorrow.

Not by either passively or even ‘aggressively’ preparing for socialist revolution but by the cumulative development of the power of the working class suggested above, with the certain knowledge that a revolutionary break with the capitalist state and system will be required.

To condemn Syriza for negotiating with capitalism when it cannot be overthrown is a bit like condemning trade unions for negotiating a pay award when they should be overthrowing the wages system.

The third has been pointed out here – Syriza will be damned if it does not get some sort of result and the executor of that judgement may be the fascists of New Dawn.  It is not only Syriza who has an interest in ensuring this doesn’t happen.

‘Ireland is not Greece’ we have been told repeatedly over the past five years or so.  If Syriza is anyway half successful Ireland will look pretty stupid if it isn’t.

[i] It is interesting that the authors go beyond the argument that this is some sort of socialism saying that “The left ought to be strategically against privatizations, having at the same time as an ultimate target the gradual historical replacement of “state control” by democratic forms of social control (unfortunately this type of discussion has not been adequately developed within the left).”

Why have the Irish not revolted? Part II

imagesausterityIn my first post I qualified the view that there was something particularly weak in the resistance of Irish workers to austerity but argued that nevertheless an explanation is needed.  To develop this further we need to ask what this austerity has involved.

Some commentators would have a ready explanation.  In terms of the share of taxation in Gross Domestic Product (GDP), in terms of the share of Government spending in GDP and overall deficit as a percentage of annual value added there has not been ‘savage austerity’ so there has been nothing to rebel against.

Here unfortunately we have no choice but to enter the world of economic statistics where only the naive can expect clear objectivity and accuracy.

A post on the Irish Economy blog records that (adjusting the statistics for the well-known effect of foreign multinationals in the Irish State significantly overstating economic performance) living standards measured in GDP per person (in Purchasing Power Parity values) declined by 14 per cent from 2007 to 2011.  This is a bigger decline in living standards than in Portugal where the fall was only 1.6 per cent, in Spain where it was 4.9 per cent and Greece where it was 8 per cent.  In terms of national income (another measure) the drop was bigger – 20 per cent – and it will have fallen further since then.  It would appear that the relative quiescence of Irish workers needs additional explaining.

But does it?

Any Irish statistic that uses GDP is immediately suspect for the reason above but not only because of this.  GDP is a measure of value added which means the 2007 figure will include property produced at vastly over-inflated values.  Houses and offices built and priced at one value will have been shown subsequently to have been worth 50, 60 or 70 per cent less, or sometimes to be completely worthless.  A moment’s thought reveals that this is not a characteristic simply of Irish statistics but of measures of capitalist production everywhere.

When we think of the effects of the banking industry on measures of economic growth we again see that this measure is seriously distorting, not only because of the difficulties of capturing accurately what is happening, but because of the nature of capitalist production.  This takes place through the production of commodities whose real value is only realised after production. The value of these commodities is elaborated through the workings of the market which reveals the socially necessary value of output in a cyclical fashion.

For economists wedded to capitalism recessions are always the result of exogenous shocks outside the system or of purely irrational behaviour within it, which amount to the same thing.  For Marxists the cycle of boom and bust is how the values of commodities are established and then re-established in a constant process.  By nature therefore there can be no precise measure of value produced at any one point in time or over any one period.

In figures for GDP the distinction between use value and exchange value is absent never mind any accounting for how really ‘socially useful’ the use values produced are – ghost estates and weapons compared to commodities actually consumed by workers. This is to be considered on top of the well-known criticisms of measuring living standards by GDP.

There are alternative measures we can review but before we leave behind this discussion we should appreciate that what we have been looking at is not simple mismeasurement of economic activity but one form of the appearance of real contradictions within the system.

From the point of view of our particular investigation we can make two points.  That a critical review of some of the figures means the boom was not as boomier (to quote Bertie Ahern) as some statistics might appear to show and the recession not as sudden and complete a reversal as might first appear.  The expectation of more or less immediate revolt might therefore be less justified?  Other evidence however might suggest that such a view should be considered a relatively minor factor.

Secondly, the constant reporting of such economic statistics plays an ideological role such that workers must accept real changes to their lives on the basis of these statistics.  Workers are subject to such pressures not just in the recession but also in the boom – encouraged to get into unsustainable debt for example.  To the extent that they do the latter they are then under ideological assault to accept that they, along with everyone else, ‘partied’ and went on a ‘mad borrowing’ frenzy, as Taoiseach Enda Kenny has put it.

Some commentators might argue that a recognition of ‘guilt’ has played a role in short-circuiting resistance but the existence of such undoubted views is as much a result of demoralisation as a cause of the lack of resistance.

There are other statistics we can look at to see if there are material reasons for the lack of opposition apart from this particular ideological one.

What appears a more relevant statistic is called Actual Individual Consumption which encompasses goods and services consumed by households including government services such as education and health provision.  This would appear to show that between 2008 and 2011 living standards in the Irish State fell more than in Spain and in Portugal but less than in Greece or Iceland.

Actual Individual Consumption

State

2008 index

2011 index

Percentage fall

Ireland

109

100

8.3

Spain

99

94

5.1

Greece

104

94

9.6

Portugal

84

82

2.4

UK

123

118

4.1

Iceland

122

107

12.3

 

This measure is made up of a component of GDP so is subject to some of the criticism above.  We have already seen that three different measurements of living standards result in reductions in living standards of 20 per cent, 14 per cent and over 8 per cent, depending on dates and the measurement adopted.

What we can say with certainty is that living standards fell abruptly and significantly due to the crisis and it is not obvious that the severity of the fall in any country determined the relative extent of opposition to austerity.  It is necessary before drawing any conclusions to look at what might be at least some of the components of the fall in living standards, not by any means only a result of the effects of Government austerity policies.

By one measure unemployment in the Irish State increased from 3.4 per cent in 2007 to 10.4 per cent in 2012, a tripling of the rate in only five years.  The economically inactive, which must contain many who have given up hope of getting a job, increased from 27.5 per cent of the population aged 15 to 64 to 30.8 per cent.

Using a different measurement unemployment in the Irish state was 13.5 per cent in January 2013 compared to 17.8 per cent in Portugal, 26.8 per cent in Spain and 27 per cent in Greece.  Clearly the crisis has hit the latter countries much harder than Ireland.  It is by no means clear that higher unemployment breeds resistance since its function under capitalism is to facilitate increased exploitation of the working class.  The mobilisation of the unemployed is not always for progressive reasons, which is one reason we have noted before that economic crises often breed reactionary movements.

Once unemployed some workers face the prospect of hardship and one measure of this defined as deprivation, or being without two or more basic items, has increased from 11.8 per cent of the population to 24.5 per cent in 2012.  The possibility of this is affected by the level of welfare an unemployed personmight rely upon and this is measured by the net replacement rate, or the payments due to the unemployed as a percentage of previous net income.  This obviously depends on whether the person has children or is married etc.

Net Replacement rates 2011

 

No children

2 children

Country Single person One earner

Married couple

Two-earner Married couple Lone Parent One-earner married couple Two-earner married couple
Republic of Ireland 50 81 75 64 75 81
Greece 49 54 75 58 63 80
Spain 79 76 90 77 75 89
Portugal 75 75 92 77 76 91

 

The table shows that Greece has significantly lower replacement rates than the other selected countries for most categories but that the Irish state’s is generally lower than Spain’s and Portugal’s.  It would not appear that the prospect of a more significant loss of income as a result of unemployment has spurred opposition in Ireland relative to that in Spain or Portugal.

The other obvious way workers cope with periods of unemployment is falling back on any savings that they have accumulated.  The following table shows the movement in net financial assets per person (€) in the various countries:

Country

2007

2011

Republic of Ireland

23,634

26,279

Spain

21,698

16,328

Portugal

19,950

19,750

Greece

19,681

10,105

Euro area (17 countries)

37,289

36,201

 

The table shows the Irish State to have the highest level of financial assets (though much below the Euro area average) and that this even increased between 2007 and 2011!  Since these figures say nothing about the unequal distribution of wealth and we know that many have suffered unemployment, cuts in wages or tax increases, it is clear that certain sections of Irish society are bearing up quite well.  In the other countries financial wealth fell and in Spain, but particularly in Greece, fell quite dramatically.

Such average figures hide as much as they reveal.  Average household disposable income in the Irish state fell from €49,043 in 2008 to €41,819 in 2011 but this was still significantly higher than in 2004 when it was €38,631.  Right wing commentators have often made the observation that incomes have often just gone back to such and such a date and we are all much better off than before the boom kicked off in the first half of the 1990s.  This is undoubtedly true for many but doesn’t provide an answer why as a class Irish workers have resisted austerity so weakly, unless the argument is that expectations have very quickly reduced.  Is this however another result of defeat or a contributing factor to it, or both?

Averages can obscure because it is precisely the unequal incidence of the effects of capitalist crisis that can have decisive political effects.

Unemployment has increased dramatically but its incidence is not uniform.  Employment in construction has collapsed, from 258,000 at the start of 2008 to 102,000 at the end of 2012, a fall of over 60 per cent.  Over the same period employment in the state sector fell from 417,000 to 381,000, a fall of 8.6 per cent.  The pitting of private sector workers against those in the public sector was a clear strategy of the Government, the employers and the media and it was quite successful.

But this has not been the only divisive effect of the crisis.  Rates of unemployment among young people in Ireland, just like other countries, have been much higher than the general rate.  In the Irish state the rate of unemployment among those less than 25 years old was 26.6 per cent in April this year while it was 42.5 per cent in Portugal, 56.4 per cent in Spain and 62.5 per cent in Greece.  These are truly staggering figures.  The rate of long term unemployment has increased from 29.2 per cent of total unemployment at the start of 2007 to 45.5 per cent at the end of 2012.  What this should remind us, is that unemployment is a divisive imposition of the effects of capitalist crisis that impacts not only on those without a job but also those in employment.  Emigration has returned and is continuing to increase, up from 87,100 in the year to April 2012 to 89,000 in the year to April 2013.

None of these figures illustrates the hardship caused by tax increases and public expenditure cuts that can affect the most vulnerable the most.  They do not include the effects on people’s experience of negative equity, the full effects of which have yet to hit home.  Here again it is younger people who are more likely to be in negative equity and to be in arrears in their mortgage payments.  And of course the figures do not tell us that the results of the crisis and austerity are to be here for a long time.

Over 32 people were unemployed for each job vacancy in 2012, while the figures for Spain and Portugal were 72.6 and 90.4 respectively.  The General Government Debt as a percentage of GDP was 117.6 per cent in 2012 while the 2012 EU Fiscal Compact stipulates that where this is above 60 per cent it must reduce by 1/20th per year.  In 2012 the in-year Government deficit was 7.5 per cent which means the debt was not getting smaller but getting bigger.  Normally optimistic forecasters are predicting that unemployment, as measured by the International Labour Organisation methodology, was only to reduce from 14.7 per cent in 2012 to 13.9 per cent in 2014.

So what are we to make of all these figures?

The fall in living standards has been significant even if not so sudden or large for some sectors of society as others and not on the same scale as some other countries such as Greece.  Certainly the disproportionate effects on young people and rise in emigration have blunted resistance but these factors exist on the same or greater scale in some other countries in Southern Europe where resistance has been greater.

It is not therefore the effects of the crisis themselves that explain the response even if these act to weaken certain social and political reactions.  The left wing economist Michael Taft has claimed that the ‘squeezed middle’, the 4th to 8th deciles of income earners, suffered declines in direct income in the five years leading up to the crash, gaining only as a result of social transfers.

During the boom the level of trade union organisation fell relatively as union density dropped from 46 per cent of the workforce in 1994 to less than a third in 2007, and only 16 per cent in the private sector.

Thus even during the most favourable circumstances, when workers are best placed to protect and advance their living standards, they were unable to do so with their own strength.  During recession such weakness is exposed.

Now they are subject to the vicious laws of the capitalist market and, as we said in the first post, short of overturning the system there is a limited amount workers can do about this without challenging the system itself.

During this post I have said that workers have not resisted austerity but in truth the great mass of unemployment, insecurity caused by mortgage arrears and negative equity, and the drop in personal consumption are not so much the result of the austerity policies of the Government, which of course have made things worse, but of the capitalist crisis.  This crisis can in certain circumstances be postponed or ameliorated by the State but it cannot be suppressed and certainly not by a State in bankruptcy.

When even during the boom large number of workers dependency on this state increased rather reduced and rather than their developing their own independent power, it can be little surprise that when the state turns round and kicks them in the teeth they are unprepared.

Some socialists argued again and again during the boom that social partnership, the vehicle by which the Irish trade unions hitched themselves to the State, was to be opposed not mainly because it prevented workers making gains in their living standards that they should but because it rotted away their independent organisation.  This has not just organisational consequences but political and ideological ones and it is to these that I need to look at next.

Why have the Irish not revolted?

Public-service-workers-st-006The defeat of the opposition to the property tax and the ability of the Government to impose a second Croke Park austerity deal might lead many to conclude that resistance to austerity has been defeated.  Even before this many have commented that while Greece has witnessed violent protests and numerous general strikes the absence of such events from Ireland is notable and remarkable.  General strikes have also taken place in Spain and Portugal but not in the Irish State.

The relative electoral success of the United Left Alliance appeared to blind some to this but the collapse of the ULA has simply confirmed what is more generally understood to be the case.  More and more it is acknowledged on the Left that we have to face the reality as opposed to perennial false claims that an upsurge is taking place or is just around the corner.

Realistic assessments of the state of workers’ action have often been drowned out by childish claims that this shows one is insufficiently revolutionary, underestimates the workers , their ability to change their ideas quickly or that such views will not encourage workers to take action.  Not in front of the children appears to be the motto.  Workers are always ‘angry’ and all it needs is the right campaign, so long as it is active enough, to stir them into action.

Reality is imposing itself and no sound bites along the lines of ‘the darkest hour is just before dawn’ can hide the fact that the economic crisis has resulted in the imposition of austerity on workers without effective resistance.  Why is this?

First we must qualify the judgement that Irish workers are peculiarly useless.  Commentators have remarked in similar terms about the countries in southern Europe.  We have noted before that more or less spontaneous social explosions have not resulted in great advances by the working class.  Greek workers have been by far the most combative in terms of general strike action but in hardly anywhere has living standards plummeted so much.  I have also noted in one of my first posts that economic crises spurs growth in extreme reactionary forces and we have seen this is in Greece with the rise of the Golden Dawn movement.  So Greece is no model to seek to copy.

Secondly Irish workers have fought back albeit within very strict limits.  I can still remember the very large demonstration in November 2009 in Dublin, which had many working class people from outside the ranks of the trade unions taking part.  The following year public sector trade unions organised a successful strike.  At a local level in certain places and at certain times strong campaigns have developed against tax increases or hospital closures.  All this and more was reflected in the vote for ULA.

There is however an over-estimation about what workers can achieve within the limits of the capitalist system – a general misconception that workers’ struggles can overturn the laws of capitalism.    For example, if a company goes bust and attempts to close down, making all its workers redundant, it is pretty obvious that strike action will not achieve very much.

At this point many on the left propose that the capitalist state protect workers even though these same people have a part of their brain that tells them that the state is a weapon of the capitalist class that cannot be reformed and must be smashed.  They also believe that the emancipation of the working class must be achieved by workers themselves but usually object to the idea that, instead of the state, the workers should take over and own and run these workplaces as workers cooperatives.

It is a similar situation at the level of society as a whole and at an international level.  The Irish state was and still is bankrupt.  It needed a massive injection of money to save the banks and put itself in a position to start reducing its mushrooming debt.  Austerity is a means of doing this.  Again the Left argues that the state can adopt policies of taxing the rich and spending money on investment that will restore the capitalist economy to economic growth, which will then deal with the problem of the debt.

This is not however the view of socialists.  The socialist view, confirmed once again by recent events, is that capitalism inescapably produces economic crises which are dealt with and resolved by the laws by which the system works, including through unemployment and destruction of unsuccessful capital whose markets and sometimes businesses are picked up on the cheap by those remaining.  It is not possible for the capitalist system to prevent such crises by adopting policies of more investment, as for example argued by left followers of Keynes.

It is not therefore possible for workers no matter how well organised to prevent the laws of capitalism from working.  This at least was the view of Marx and the evidence of history would again confirm this.  So workers resistance against austerity may be able to ameliorate austerity but, in so far as they are necessary to lay the foundations of a new upturn, it is not possible for workers to prevent unemployment or wage cuts or tax increases in their entirety or even to a significant degree.  In other words it is not possible within the system to prevent capitalism periodically disrupting workers’ lives.  That’s why we oppose the system and why we propose a different one called socialism.  If we thought capitalism could work better without its nasty effects we wouldn’t be socialists would we?

Yet the left presents austerity as simply one policy option of the Government which it could choose to reject and replace with their own proposals.  But even the Keynesian alternative requires ‘counter cyclical’ state action.  In other words the austerity measures are simply postponed.  All the left’s proposals involve actions by the capitalist state in one way or another – tax changes, public investment, nationalisation etc.

The point in terms of the current argument is not that the Left is misleading workers into accepting reformist solutions that won’t work and this is a reason why resistance to austerity has been such a failure in Ireland.  These ideas are more widespread in southern Europe than they are here.  No, the issue is that, absent a socialist alternative being created, as long as capitalism exists the laws of capitalism will continue to work and impose themselves.  Resistance to austerity will therefore fail and this failure is bound in turn to lead to weakening of the resistance.

We must be careful however not to qualify the problem out of existence when it contains more than a grain of truth.  When Greek workers chanted “we are not Irish” on their May Day demonstration in Athens in 2010 they weren’t imagining the relative weakness of resistance in Ireland.

Nor can the question be dismissed by saying Irish workers did fight back – they did, but nowhere near to the extent required for success.

Nor is it credible to blame the poor politics or organisation of the Irish Left.

It is also not adequate to simply say that capitalism wins unless we create socialism. This is obviously true, although its logical implications for reformist strategies and policies are often ignored.  But it doesn’t come near explaining why the reformist strategies for resistance have elicited such weak workers’ action.  It’s hardly that Irish workers can see through such strategies and are ready for something more radical.

Socialism is not an event or a situation but a movement. Workers will only become capable of building a socialist movement and carrying out revolutionary change if they are also capable of mounting strong resistance to the ravages of capitalism.  In Ireland this hasn’t happened and there has been a retrogression of the small socialist movement, although this in itself is not particularly new.

So in Ireland the state has been able to pursue austerity policies that increase unemployment and wage restraint in order to restore its solvency in very much the same way capitalist crises work to   restore profitability in the private sector.  It has been able to do so without much of the resistance shown in other countries in a very similar situation.  This remains to be explained.

To be continued.