November 14, 2012
Costas Lapavitsas, Professor of Economics at SOAS, and a number of economists associated to one extent or another with the Research Group on Money & Finance, published this book as an examination of the effects and meaning of the economic crisis of our times for the countries in the Eurozone. They limit themselves quite specifically in this manner, not discussing the wider impact on the EU, the non-Euro member states, or the nature of the crisis insofar as it does not immediately relate to the issue of the Euro and the banks of the Euro system. What one does get, however, is a remarkably precise and detailed analysis of the constituent elements of the crisis in the Euro, the European banking system, the nature of the bailout and its failures, and the relationship between debtors and creditors within the Eurozone, which have emphatically been on the political foreground in the past two years or so.
The framework is that of examining the opposition of interests between the core countries of the Eurozone, the creditor states of France, the Netherlands, Finland, Austria, etc., and most importantly Germany, and on the other hand the intra-European periphery, Greece, Portugal, Spain, and Ireland (though Ireland is not the focus of this study due to its idiosyncrasies). As Lapavitsas et al. argue, the European Central Bank and the monetary union which it underpins are essentially constructs created to achieve these purposes: first, to create a European currency which can rival with the US dollar as the ‘world money’ Marx identified capitalism must have in the absence of a metallic standard; secondly, to unify the money market and thereby the competitive strength of the financial institutions of the Eurozone; thirdly, to facilitate the imposition on the EMU member states of a permanent system of austerity, inflation-targeting, and budgetary restraint which would make any serious national opposition to the interests of European finance capital (and industrial exporters and carrying traders) impossible. In this it has succeeded wonderfully well.
However, as skeptics pointed out from the start, the Eurozone contains a serious contradiction between the interests of the capitalists of the core (well served by this) and those of the periphery, for whom this does not work as well. The authors rather unusually emphasize Germany’s primary position within this system, and its dominance over the interests of the periphery, as following not so much from its export strength as from the fact it has had the longest and most enduring neoliberal wage repression of the Eurozone. This then combines with its absolutely high levels of productivity and its political power over the ECB (located there) to make it fundamentally more ‘competitive’ than the southern countries, which have seen rising nominal wages but insufficient corresponding productivity growth. This is supported and further examined by a great deal of graphs and data, unfortunately often not clearly visually presented.
A second major section of the book is to argue the effects of the financialization of the Eurozone, and how this has played out in generating much of the crisis. The crisis started, of course, with the collapse of interlinked financial bubbles in the United States – the real estate bubble and the multiply leveraged debt bubble. But the focus is here on the Eurozone only, and this has experienced similar phenomena. It is certainly worth remarking on how commonplace it has become for commercial banks to undertake financial ‘investments’, for consumer debt to skyrocket in response to stagnating real wages and an increased dependency on credit in the open market for previously ‘shielded’ consumption like education and housing, and to note the enormous expansions of fictitious capital luring in investment from institutional investors, domestic corporations, and so forth, exposing them to much greater degrees. However, this aspect remains somewhat undertheorized in this book. There is little explanation of the political economy of financialization itself, its origins and its relationship to the rate of profit in the overall economy – other than declaring it, rightly, as part of the neoliberal project. This is perhaps defensible as such considerations can be found in various other books, and one cannot expect one book to discuss everything. But a more political economic background might engage the work more with the criticisms of much of the distributionist theories and ‘crowding out’ explanations of financialization as offered by for example Andrew Kliman, and would contribute to that debate. As it stands, financialization appears as an exogenous cause explained merely in terms of ideological drives for deregulation and the economies of scale of large corporations that allow them to self-finance investment, as also summarized by Lapavitsas here.
The third subject of the book is probably of the greatest political-economic interest, namely a practical discussion of the trends in the current crisis and the attempts to resolve it on the part of the ‘troika’, and what the periphery countries can do about it. The focus here is, understandably and rightly, mainly on Greece, although no doubt much of the same applies to Portugal and perhaps also Spain. Lapavitsas et al. take a strong stand against what they see as the failures of the political left to properly understand and critique the presuppositions of the EMU system, thereby paralyzing left politics at precisely the moment it needs to intervene strongly. One might add that this also leaves open the door to other forces to do so instead, as already becoming visible in Hungary and Greece. The left’s response has been a muddled back-and-forth between on the one hand suggesting massive lending and investment by the ECB and Eurozone countries respectively as a simple stimulus programme, and on the other hand an inchoate resistance against the European system as a whole, proposing solutions which would involve a more ‘popular’ Euro policy.
For the authors, this is inadequate and incoherent, and they make a strong case. As they describe it, there are essentially three possible routes: the first is to continue the current policy. That is to say, the troika provides liquidy and limited debt relief to periphery countries in return for severe austerity policies. The purpose of this is purely to retain the credibility of the Euro as a whole and thereby benefit the financial institutions as well as the beneficiaries of the Euro as a world money, and the costs come down entirely on the shoulders of the working people of Europe and especially of the periphery. There is some discussion here, as in many post-Keyenesian arguments, about the inability of the austerity policy to actually revive growth and investment, but this strikes me from a Marxist angle as besides the point: its sole purpose in the short to medium run is to favor financial capital interests, as with Cameron-Clegg’s policies on behalf of the City of London, and the restoration of the investment climate for the national bourgeoisies is left to the mass devaluation that results from prolongued recession and unemployment. Here, Marxism and the theory of the transnational class have considerably greater explanatory power than the (post-)Keynesian analysis, which would have us believe the ruling class is simply unable to see its own interests, and that those interests can partially coincide with those of the population as a whole. We must resist such notions.
However, on rejecting the recipe of austerity and recession, two other options remain. The second is the ‘left-EMU’ option, that is, to attempt to use or reform the EMU institutions such that a genuinely ‘popular’ policy can be followed. This seems to be the notion favored by much of the social-democracy in Europe insofar as it is having second thoughts about the neoliberal turn, and also that favored by the trade union leaderships and the left ‘civil society’ and so forth. Here Lapavitsas et al. are very useful in their denunciation of this approach, at least for the periphery. As they rightly note, there is very little reason to believe even a reform like abolition of the Stability and Growth Pact would be able to overcome the contradictions inherent in the Euro project as currently conceived, and aside from that, it is virtually inconceivable that the ruling classes of Germany, France, the Netherlands and so forth would be willing to move any further in that direction. They have already permitted the ECB to make various direct interventions to restore liquidity, they have accepted partial defaults on creditors’ terms, and they have had to substantially finance the EMU-wide bailout funds like the EFSF – all of which entails in practical terms a distribution of value from the core to the periphery. The middle classes of northern Europe are well aware of this, and are exercising strong pressure not to budge any further. A left option within the EMU is therefore for the periphery actually a more utopian possibility than the third, the option of exit.
The exit strategy is the most politically significant and the most interesting, and especially for Greece appears as the only really viable option purely from the point of view of economic development. While restoration of national fiscal and monetary power and disembedding from the EMU on the part of the periphery might be seen by some as a concession to nationalism and contrary to the international interests of the workers, it is worth considering the substantial economic historical evidence for the importance of sovereignty in achieving developmental goals.(1) Moreover, as Lapavitsas et al. make clear, there is not much choice. The various calculated scenarios of the econometricians of the troika themselves indicate that Greece will not by the current course be able to sufficiently reduce its national debts, both public and private, and the severity of the depression in the country and capital flight are further undermining the state’s tax base. The ECB cannot indefinitely keep propping it up, simply because it is not backed by a federal or united European state of which it can be the monetary-fiscal incarnation, and therefore its risk position from the point of view of transnational finance capital is relatively unstable – one major reason why the ECB’s interventions have been much more conservative than those of the Federal Reserve. More importantly, the current prospect is indefinite high unemployment, negative growth, loss of real living standards, and loss of self-determination for Greece’s working people, never mind the looming spectre of Chrysi Avyi. This cannot be allowed to go on, especially as PASOK, ND, and the ‘Democratic Left’ are by no means capable of convincing the troika of EU, IMF, and ECB to act against their own interests and pressures and let Greece off the hook.
However, as the authors make clear, there are two ways in which exit could be undertaken, and their impact would be significantly different in each case. The first is the conservative exit, which would entail a creditor-led default along the lines of the ‘haircuts’ imposed so far. The creditors would then have to accept a swap of euro-denoted debt for drachma-denoted debt, for which they will impose considerable conditions in return. The Greek small savers, pension funds, middle class small investors and the like will be hit hard, while the primary financiers of the troika will demand exemption from default in return for this manoeuvre. Greek banks would have to be recapitalized, possibly on the basis of nationalization, but managed from the outside by the troika or their comprador forces domestically (as is essentially the case now in both Greece and Italy). The northern creditors would also be hit considerably, but if the exit involves just Greece, the costs would be limited and probably surmountable. However, continued participation in the EMU structure would almost certainly entail continued or more severe austerity as precondition for a later re-entry into the euro.
The option favored by the authors instead is what they call ‘radical exit’, and this is the option which socialists within and without Greece ought to examine and discuss most seriously and earnestly. In all versions, this basically involves a unilateral declaration of default, i.e. bankruptcy, on the part of a Greek government willing to act decisively in favor of the interests of the Greek masses. There would be an enforced shift from the euro to the drachma, by unilateral declaration, and of course the necessary bank holiday and capital controls imposed upon the country to prevent bank runs and capital flight. The troika and the northern expropriators would be expropriated at a stroke, the banks nationalized under public control, and the overall debt audited as to its structure (which is not currently public knowledge) and liabilities. Such a course of action in the short term is only possible if the government is willing not just to intervene, but to intervene radically and immediately, with a clear plan. Any muddled or delayed action would worsen the situation by permitting more capital flight, steeper rises in the inevitable inflation, and worse dislocations and shocks to living standards.
It is almost certain the result would in any case be painful for the Greeks in the immediate term, with inflation, loss of lending facilities abroad, and rising costs of imports (oil, consumer goods, machine tools, and medication especially). But it would permit, as Lapavitsas et al. rightly note, an actual way out that is not permanent austerity. The restoration of national sovereignty in the political-economic sphere must be used immediately to redistribute the very unequal wealth of Greece, as it is no coincidence that the periphery nations are the poorest and the most unequal. An industrial plan must be developed to counteract unemployment, the bourgeoisie and Orthodox church seriously taxed for the first time, and the ossified political and civil society structures crushed. Depreciation can be expected to improve the ‘competitiveness’ of Greece over time, and it is a great opportunity for the modernization in productivity terms Greece has never properly undergone. The prospects for living standards in Greece would over 10 or 20 years be almost certainly considerably better than those under the current policy, and the authors use the example of Argentina’s default and state-led revival programme as analogy.
This book certainly makes a strong argument for why euro continuation is not compatible with the interests of the working people of the European periphery. However, as may be clear from the above summary, its perspective is still somewhat limited. It is in some respects still somewhat too simplistic – for example, the authors seem somewhat naive about the compatibility of the radical course with EU membership overall, handwaving this away in the sense of ‘who knows what will happen’. It seems to me such an exit would, unless shared by several countries at once, necessarily entail an exit from the EU as a whole, given the centrality the euro project now plays in it. Also, the authors do not address the political and ideological dimension adequately. Even among the Greek population there is a great reticence about the exit strategy. This is partially borne out of the real increases in wages and consumption since joining the Eurozone, fuelled considerably by the boom period’s cheap euro credit, but it is also a serious reflection of the sense that membership of the EU and its inner structures acknowledges Greece, Portugal, and similar countries as belonging to the modern, developed, and cooperative European project. Much of this is no doubt illusion, but it is a live one. The very fact that the EU to many people stands for a historically unprecedented peace between the major European states and for a guarantee of a certain formal freedom and equality – the formal equality of money – over the isolation and tyranny of Colonels and falangists cannot be ignored. Here, ideology plays an important role in holding back more radical critiques and strategies, out of fear of throwing the baby away with the bath-water. This is not a wholly unfounded fear, and any left programme of exit must address it.
Another political economic limitation is that the book’s analysis and strategic considerations do not go beyond the immediate logic of the developmental state. Indeed, much of this is no doubt intended to function as transitional demands towards a more lasting change of social formation; this is certainly true for a Marxist economist like Lapavitsas, although perhaps less so for a Keynesian like James Meadway. However this may be, the use of for example Russia’s recovery strategy after 1999 as proof of the possibility of a radical option shows the strength but also the limitation of this strategic idea. After all, how radical is Putin’s militarist, oligarchic developmental nationalism? There is little room here for at least critically discussing the traditional left critiques of nationalism and of the idealization of work, in short, the critique of productivism.
Certainly the conditions of the Eurozone and the crisis are such that the ‘development in one country’ route cannot be avoided – whatever the Trotskyist clichés may be, one must either act or not, and someone has to make the step. One could not blame Greece for a developmental nationalism in this way. But the logic of competition between nation-states under capitalism necessarily forces a contradiction between such developmental nationalism and the interests of the domestic working class, not to mention the working classes of other nations. A more thoroughgoing socialistic approach would be needed to disembed the exiting countries from these logics as well. The difficulty there is, however, that unlike China or the USSR a country like Greece or Portugal has few major resources and a small economic base to start from, and an autarkic developmental state capitalism is likely not a viable option. Here the necessity of solidarity between nations, not just in words but in actually mutually supportive political-economic strategies, is paramount; else a new Greece risks ending up a new Cuba. In saying this, I have by no means solved the strategic problem, and it is one fraught with political and economic difficulties. But in writing Crisis in the Eurozone, Lapavitsas et al. have made a major contribution to the sober and concrete consideration of the possible ways forward; it is now up to other socialist critics to join this debate.
1) See for example M. Shahid Alam’s excellent book Poverty from the Wealth of Nations (Basingstoke 2000) on this subject.
April 21, 2012
With the crisis progressing ever further to its inevitable denouement, restoring the rate of profit at the expense of the working class and society in general, the political spectrum is inevitably shifted to a more radical composition. This is certainly true of Greece, where the government – a ruthless ‘technocracy’ imposed from above by the creditor states of the European Union – has finally announced they will hold elections soon. The 6th of May will see the last-ditch effort at some semblance of democratic legitimation of the bankers’ coup that saw the PASOK government suborned by the will of international capital, in particular the finance system. The irony of this is that it is the very same finance system which has blossomed out of all proportion due to the inability of capital to find productive investments over the last 20-30 years. The neoliberal era is one of capitalist retrenchment, not just in the face of the working class strength and organization of the 1950s-1970s, nor the many social and cultural revolutions of this period, but at least as much in the face of the fall in the rate of profit. To this is added in the Western countries, where this political paradigm prevails, the effect of ever-increasing competition from eastern and southern Asia. This will in due time reconfigure the world-system to the long-term decline of the primary imperialist powers and those countries dependent on their trade.
Things, in other words, do not look good for the Hellenic Republic on the eve of this historical election, and the political polling reflects this. While the liberal-conservative ND maintains its position somewhat, especially combined with the support of the anti-austerity splitoff, as everywhere else the social-democratic reformists of PASOK have undergone electoral collapse. There is some reason for rejoicing over this, as the corrupt, family and region based duopoly of PASOK and ND has done nothing for the Greek people and has betrayed them at every turn. It was they who saddled the Greek people with impossible debts while spending this money on prestige projects, enriching the middle class in Kolonaki, and buying weaponry to threaten the Turks. It was they who took the inheritance of the overthrow of the Colonels and subsumed Greece to the rule of German and French capital and hitched them to the NATO imperial bandwagon in the name of preserving stability. So, good riddance to them. The left parties, split along sectarian lines but each representing a meaningful proposition for the country, are doing as well as 30% combined; although we must not forget the likelihood of a low turnout among the country’s left out of a justified disillusion with ‘liberal democracy’.
A real concern however, as always with such developments, is the possibility that the rise of the revolutionary democracy is pre-empted by attempts at capitalist restoration at the expense of any remaining democratic norms and restraints – i.e., fascism. This is no mere illusion, and this is shown clearly in Greece. The tabloid press as well as the mainstream papers and TV stations have launched a renewed philistine offensive to pin the blame of Greece’s predicament on the influx of mainly illegal migrants to the country, whether Albanian, from Africa or otherwise. Such cheap foreigner-baiting is a perennial fact of life in Western countries, but always rises in times of crisis and presents a real threat to the safety of foreign workers in Europe and elsewhere. While poor economic climates do deter migration to some extent, the very real differences in wealth for working people between the West and the rest will continue to draw migrants. In the absence of a committed socialist vision among the working class, it is not too difficult to bait them by pointing to the effect of migrants on lowering the wage level, on adding labour competition, and so forth. This is a vulgar economic view, and precisely the sort of superficial analysis Marxist theory is created to combat, but so far neither the KKE nor others have taken their duty entirely seriously in this regard – a reflection of the power of the labour aristocratic ideology in all Western countries.
In addition to this, there has been the rise not just of the reactionary party LAOS, but more significantly of Chrysi Avyi, the “Golden Dawn”. This eloquently named movement is an explicitly neo-Nazi party, presenting a vision of a Greece by and for “Aryans” only, to which by some trick of historical imagination the Greeks themselves are apparently to be counted; having switched from the silly worship of Zeus to a neo-Orthodoxy, they appeal to clerical elements in competition with LAOS; and they explicitly use Nazi symbolism in flags, rallies, and so forth, taking care to make themselves a physical presence in working class neighbourhoods in Athens and elsewhere. Normally, such movements remain fringe, fall apart under internal contradictions, and cannot move beyond the occasional lynching of an unfortunate migrant. But under the pressure of the crisis, the situation hardens, and this movement in its explicitly fascist form is now polling at 5%, sufficient to present MPs in the Vouli in May.
This raises the real threat of fascist consolidation in the political sphere. They go far beyond the prospects of a BNP, and shed their ‘national’ and ‘democratic’ hypocrisy to a far greater degree still than the Front National in France or even the NPD in Germany, but the rise of such movements with considerable mass support across Europe is a deeply worrying development. Hungary has already demonstrated that mainstream, liberal politics is by no means capable of resisting the fascist challenge when confronted with it. It is a real threat in a time when capitalism along liberal-‘democratic’ lines seems to offer no way out and the left is not (yet) capable of rising to the challenge itself. For now, in most countries the groups are still marginal, and even in Hungary by no means yet ready to seize power. But the historical examples of fascism in Europe demonstrate how quickly such a transformation can occur – it takes but a few years of extended crisis and inability of the parties of the mainstream to deal with it. This is by no means inconceivable today.
Does this mean Greece is in a Weimar situation? My answer is: not yet. Chrysi Avyi nor LAOS has sufficient mass support to make this a reality, and Greece is in fact (to its great credit) one of the few countries where the left forces are overtaking the right in responding to the crisis of capitalism; a pattern we may yet see in France as well. Nonetheless, the predicament Greece is in must not be underestimated, nor should the consequences be. Greece has effectively defaulted on a portion of its debt already, but is still unable to repay, and must therefore default more systematically. The only way to do this within capitalism and without enormous losses of living standards is by devaluation of the currency, confiscation through taxes or otherwise of much of the assets of the wealthy inside and outside the country, and finally a repudation of the debts to foreign creditors combined with a national investment programme forcing the liquid assets to be used productively. However, such solutions are and will remain impossible on the basis of any government beholden to the interests of foreign creditors and the European Union political commitments to that class, as the German response to the possibility of devaluation (by leaving the Eurozone) has shown. Moreover, ND will never be capable of such a response as they are too reliant on precisely those classes that have benefited from the situation: the Greek commercial capitalists, bankers and shipping magnates, the tax-dodging doctors and lawyers of Kolonaki, and even the labour aristocrats from those sectors dependent on German and French investment.
For these reasons, unless some sudden change of perspective grips either the comprador technocrats ruling Greece or the creditors’ representatives wrapping themselves in the flag of the Pan-European Idea, we will continue to see a gridlocked government in Greece while the living standards can be expected to decline further. Under such circumstances, a fascist solution or a coup de main is not off the table. Already, the Greek cabinet members cannot show themselves in public unguarded for fear of their lives, and one of the last acts of the original PASOK government was to replace the heads of the military branches, whose loyalty was apparently not certain. This is not yet quite Weimar, 1932, but it could perhaps be compared to Weimar, 1928. The fascists in Greece hitherto lack any annexationist impulse, and have none of the class potential to that effect that supported the NSDAP in Germany, as I analyzed in previous writing. We must therefore hope the left in Greece can overcome its divisions in the face of this remote, but real threat. With an eye to elections in France, to the situation in Hungary and Romania, and the prospects of a socialist answer to the crisis of capitalism, much may turn out to depend on this.
June 22, 2009
Today the Deutsche Presse Agentur reports that the Bundestag as well as the Länder have accepted the bill that would amend the German constitution to ban deficit spending.1 Of the sixteen Länder, only three voted in opposition. In Germany, all left forces are represented by Die Linke, which this past weekend held its party conference in preparation for the Bundestag elections later this year. It vigorously opposed the bill, but did not possess the power to prevent it. Now it has sought the advice of the Bundesverfassungsgericht in Karlsruhe, but it is not clear on what basis they seek to have them block the bill on their behalf.
The results can well be imagined. This rigid deference to economic dogma is likely to chain the beast of state until it can no longer move. But it will soon become clear to the Germans how difficult life is when one can neither save nor borrow. In California the result of a similar mindset has been disastrous already: there, ‘white’ taxpayers threw off the yoke of maintaining a humane lifestyle for the many immigrants to that state by passing an amendment effectively making any absolute increase in taxation impossible. Given the strong population growth from immigration over the decades, this had the obvious effect of utterly bankrupting the state. It is now forced to choose whether to auction off its future by shutting down its excellent state education system or whether to die heroically in the present by declaring bankruptcy and effectively committing suicide. It may be suspected a similar motive is behind this particular law in Germany. The very wealthy bourgeois of southern Germany in particular have long been incensed at ‘their’ money being spent on such fruitless endeavors as state improvements in the dilapidated eastern and northern parts of the country.
It is telling that the attempt by the European Union of the bankers to restrict nations to deficit spending of no more than 3% of GDP has failed entirely, with most major nations blithely ignoring the regulation: Germany itself already has a deficit worth 4% of its GDP. In 2005, a change in the regulation was passed that makes it for the most part nonoperative.2 If even the cautious German politicians see no value in placing themselves in an economic straight-jacket for the benefit of bank creditors, there is little reason to believe this law serves any other purpose than to ‘starve the beast’ in favor of feeding the wealthy. No surprise of course that precisely the poorest northeastern Länder Berlin, Mecklenburg-Vorpommern and Schleswig-Holstein opposed the bill.
Insiders are already quite aware that the European Central Bank’s policy is strongly based on the views and methods of the German central bankers, and their orthodoxy of economic dogma is infamous. Desiring to be ‘more Roman than the Pope’, their restrictive monetary policy has threatened deflation in a time of crisis, while consistently causing unemployment in the major industrial nations of the continent to be relatively high, even so much as a steady 7-10%. With the current crisis reaching its peak, in Spain unemployment is in fact already 17.4%, in France 8.8%, in Germany itself 7.6%.3 Until the current crisis, the United States had a lower unemployment rate, mostly thanks to its own central bankers being a lot less dogmatic in pursuit of its national interests. They knew full well the dangers of further social segmentation in as unequal a country as theirs. Only the fast industrial collapse and evaporation of capital caused by this crisis of capitalism, as well as the large-scale mismanagement and stock-jobbing fraud on the part of private bank management, has managed to raise unemployment in the United States to the higher level of the major European economies. Until recently it was also the case that those nations pursuing get-rich-quick schemes, relying on influx of very volatile financial capital to help them advance in the line of nations, managed to evade the phenomenon of large-scale unemployment. However, the problem with the policy of stock-jobbing and loansharking as basis for a national economy is that money that is quick to come in is equally quick to get out. Any downturn and the established capital evaporates faster than the steam of the geyser or the tones of the harp.
The nations with established niches as carrying-traders are essentially mere underlaborers for the major industrial powers and completely dependent on them. Examples of this can be found in the Netherlands, in Austria, in Denmark and so forth. These seem to have maintained their position for now, thanks to the vast sums of public money flung into the pit of capital’s loss write-offs in the industries of the major economic powers. If we allow for a switch in metaphors, this makes their position similar to that of the bird that lives on picking the leftovers from the crocodile’s teeth. Easy for them to go along with the beast, as they do not have to pay for its maintenance and yet can profit from it nonetheless. But this also means their actual economic significance on a larger scale remains limited, and with it their political independence. Remains to deal with the nations that hoard the black gold that enslaves the modern man as much as the yellow enslaved the Athenians in Shakespeare: those nations, whether Norwegians or Arabs, are to the economic powers what Timon of Athens was to his false friends. Their ending is likely no better: ours is to play the role of Apemantus at this bankers’ banquet.
2.COUNCIL REGULATION (EC) No 1056/2005.->
3.Schmitt, Rho & Fremstad, “U.S. Unemployment Now As High as Europe”, CEPR Issue Brief (May 2009). http://www.cepr.net/documents/publications/US-EU-UR-2009-05.pdf .->
June 4, 2009
With elections being waged for the massive talking shop known as the European Parliament, more than in any other country the mood for revolt is rising in the United Kingdom. The petty, venial corruption shown by the Westminster MPs over the past years, recently revealed but by all and sundry plausibly considered part of a much larger pattern of self-enrichment, has greatly increased the skepticism and hostility of the British public towards the established three parties. Indeed, the corrupt reformist policies of Blair c.s. domestically and his petty vassalism towards the United States and its military adventures in the realm of foreign policy, combined with the continued production of futile nonentities on the part of the Tories and Liberal Democrats had already done much to encourage this, but the so-called ‘expenses scandal’ has been the proverbial straw that broke the camel’s back for many Britons.
The political implications remain to be seen. Many Britons will opt to not vote at all, as has been the norm for European Parliamentary elections, which is both a sign of the petty bourgeois apathy of the overly sheltered and uninformed British population as well as being a sign of the general lack of purpose in voting in elections where outcomes barely make a difference, as the spoils system of the perpetual centrist coalition in the European Parliament makes even voting under the superior system used for its elections exceedingly futile to the politically conscious. The risk is of course that the people who do show up, estimated to be no more than 30% of the electorate, are likely not so much to vote for the left as for the Little England reactionaries of Libertas and UKIP, not to mention the fascist BNP. In this way the elitism of the EU technocrat-parliamentarians will produce its own gravediggers in the form of a resurgence of reactionary populism, but unfortunately they are also likely to dig a mass grave for left-democratic forces along with it.
What then to make of this? Of course attempts by left coalitions such as the well-conceived but awfully named No2EUYes2Democracy to use the opportunity for a left organizational surge must be applauded, but their policy of abstentionism will effectively enhance the power of the right. Moreover, they appear to have little intention to move their organization beyond these elections. It is not necessarily a problem that they do not feel the need to form yet another sectarian party or to produce platforms without the pillars of support that any platform needs to rise above the level of a doormat, but to channel all the left potential that exists in the broader British public as well as with the RMT and then to squander it by closing shop after the elections is pure parliamentarianism, which makes their abstention policy all the more self-defeating. The SLP is also present, but their sectarian basis and the narrow Lassallean antics of their leader Scargill will render them mostly harmless to the establishment.
What is therefore to be agitated for above all is to use the opportunity of the election temperament and the ‘expenses scandal’ to frighten the battered established parties into granting electoral reform. Labour had promised this but, as to be expected, once in office reneged on it; however there has been increasing discussion of the topic in various newspapers, and the Electoral Reform Society has seen a flurry of new activity. Labour’s own government commission recommended keeping the district system, which British voters are very used to for Westminster and abolition of which may easily prove a bridge too far, but replacing the utterly retrograde ‘first-past-the-post’ voting system with a specific variant of Approval Voting, which although favorable to larger parties nonetheless greatly improves the manner of actually counting votes. Also a possibility is introducing STV, as is in use in Ireland, which also gives some benefit to larger parties but allows ranking. There are various good systems that can be compatible with maintaining constituencies, even ones little discussed such as Condorcet’s system, and which one is chosen is rather less important than that the occasion be used to make it finally happen; all the more since it has been an issue since the decline of the Liberal Party.
A referendum on this topic must be held and held soon, using the opportunity of widespread disaffection to force through reforms. In circumstances when progressive forces have little actual power, they can still use their moral force to frighten and cajole the ruling class into reforms, as was proven by the failure of the Chartists that was nonetheless followed by a Reform Bill, although it is to be hoped the distance in time between protest and reform will be less this time. An electoral reform would also enable the progressive forces remaining within New Labour to depart their dying host organism and set out on their own, which will strengthen the political visibility of the British left, necessarily weak as it is, and further enable the death of the right element. Therefore, delaying tactics such as Gordon Brown’s “National Democratic Renewal Council” must be rejected, and the occasion must be used by all left forces, union, MP or otherwise, to call for a swift electoral reform referendum, if necessary to coincide with the general elections in 2010.