A) Crisis of Capitalism
The significant share of the vote that SYRIZA won during the elections of the 6th May and its increasing popularity coming up to the elections of the 17th June are not phenomena isolated from the global situation. Following the wave of support in Latin America for the Left during the second half of the last decade, and the recent uprising across the Arab world, what we are witnessing now is the radicalisation of society even in the heart of the capitalist West, starting with Greece.
Since the Nazi withdrawal in 1944, it is the first time that any party connected to the heroic Greek communist movement has ever come so close to taking office. This development marks the beginning of the shift of the working masses of Europe towards the Left following the deep systemic and international crisis of capitalism.
We Marxists of SYNASPISMOS and of SYRIZA repeatedly emphasise that the present global economic crisis is not a consequence of ‘neoliberalism’, ‘corruption’, ‘mal-administration’, or of the reckless actions of some ‘rogues in finance’; it is the product of the systemic contradictions of capitalism. The fundamental capitalist contradiction is precisely this: the social character of production is stifled by the fact that under capitalism production operates on the basis of profit-seeking and that the means of production are subject to private ownership. The term ‘social character of production’ means that capitalism, in comparison to previous socio-economic systems, transformed the means of production to such a degree that required them being worked by a large number of people, and, this in turn led to the development of the international division of labour. However, this process of the socialisation of production contains its own contradiction in that it operates within the strict parameters of private ownership in pursuit of private profit.
As Marx indicated, profits essentially are the accumulations of unpaid labour. This means that in order to make greater profits, the capitalists keep pushing down the cost of labour – that is to say, the wages and salaries of the workers – thus restricting the purchasing power and levels of consumption of society as a whole. Consequently, through this fundamental contradiction between the social character of production, on the one hand, and private ownership of the means of production, on the other, mass consumption is restricted. This, in turn, is a decisive factor in the surfacing of economic crises that within a capitalist context assume the character of crises of overproduction.
What also arises from this fundamental contradiction of capitalism is the anarchy of production. Under a capitalist system, there is no rational planning of the production and distribution of goods. Each capitalist produces independently from other capitalists. This anarchy frustrates the equivalence between production and consumption, and, furthermore, contributes towards the development of crises of overproduction. The tendency for consumption to be restricted and the anarchy of capitalist production operate together to cause the outbreak of crises of overproduction. A consequence of such crises is the destruction of parts of production, the scaling-back of production, the rendering of millions of workers jobless, and the deterioration of the working conditions of those still employed. All these sacrifices are imposed to guarantee the survival of the capitalist system.
As Marx and Engels explained 165 years ago in their renowned ‘Communist Manifesto’, the bourgeoisie, in their attempts to deal with such crises, merely create the basis for more profound and extensive crises. That is what we have witnessed in our times. In order to avoid a deep recession in 2008, the bourgeoisie threw astronomical sums into system, around US$14 trillion, from their global reserves of wealth, to finance the banks and large corporations. And in passing on the bill for all this to the workers and the petty-bourgeois, the bourgeoisie have nationalised their losses. In doing so, however, they have created large levels of national debt globally that, in light of the looming recession in the world economy, are about as containable as an exploding bomb.
In this way, it is evident that they have no effective solution to the crisis. Their attempts to deal with the symptoms of the crisis – that is to say, the enormous debt of the banks and of the state – by further burdening workers with permanent austerity, poverty, and mass unemployment, further exacerbate the crisis and threaten human civilisation with this regression towards barbarism.
A fundamental historical dilemma is, once more, placed before the whole of humanity in increasingly clearer terms: either the conscious working people take control of their own lives, rationally planning the economy, or the blind anarchic forces of capitalism continue to pull human civilisation towards barbarism! B) Keynes or Marx? It is not possible nowadays to have capitalism without austerity!
In order for capitalism to survive – that is to say, in order for the profits of the capitalists to remain intact – there is no solution other than severe and extensive austerity. Anything else from a capitalist perspective would be totally illogical. For instance, if bourgeois governments were to increase public spending, they would be stimulating inflation and ever greater gaping deficits and debts. This is the reason why, as a rule, what we are witnessing nowadays across the globe are nothing more than different versions of these very same severe austerity policies.
The old remedy of mainstream Keynesianism, which involved huge state expenditure in order “to stimulate demand”, was long ago assigned to the waste-bin by the bourgeoisie. Anyone attributing a modern version of Keynesianism to Barack Obama’s policies is making a grave mistake, as they seem to forget that the US government is currently applying the largest programme of cuts in modern history to the tune of US$5 trillion. Furthermore, the support for policies that stimulate ‘growth’ and for ‘euro-bonds’ by the bourgeois governments of France and other northern European countries is far from reflecting a new model of Keynesianism; rather, it is an attempt to transfer the burden of the recession, which is gripping the EU, and of the Eurozone debts onto the shoulders of German capitalism, that is the one that has come out the most robust and intact amongst European capitalisms following the global crisis.
Historically, Keynesianism has been attempted by the bourgeoisie and has failed. The reason why the United States were able to drag themselves out of the deep crisis of 1929-33 was not due to the Keynesian policies that Roosevelt adopted, as some have incorrectly claimed; rather, it was the weakening of the US’s competitors due to the catastrophic effect of World War II. Nor was the US’s ability to recover from the great crisis attributable to the US’s non-participation for the most part of the WWII; on the contrary, the US capitalists – through their arms sector – profited from WWII through arms sales.
In the post-war period, Keynesianism was certainly not the principal factor that stimulated the development of Western capitalism; rather, it was the galloping development of international trade. When development began to contract during the 1970s, it was clear that the continuation of the Keynesian policies that were being practiced was leading towards greater deficits and levels of debt. Consequently, this failure of Keynesianism led the bourgeoisie to turn to draconian “neoliberal” policies in order to stabilise capitalism rather than holding true to some ideological fixation.
Nowadays, reformists, within the labour movement and the Left, by supporting Keynesian methods in relation to providing ‘liquidity’ to the market, are concerned with the symptoms of a systemic illness rather than with its treatment. The crisis is not due to the lack of ‘liquidity’; the lack of ‘liquidity’ is a result of the capitalist crisis.
The mass channelling of public funds into the economy would be the shortest route towards state bankruptcies. What is more, within a capitalist economy in recession, any interference by the state such as the pumping of large sums of money into the economy is actually a channelling of funds whose value is distorted as this do not reflect the actual value of production. Thus, a huge channelling of state funds into a capitalist system leads to the kind of inflation that depresses incomes and increases debt.
Fast and easy escape routes out of this profound crisis of capitalism that reformists are in search of do not exist. Due to the profound historical crisis of capitalism that we are experiencing, a realistic and permanent solution to the basic needs of the urban and rural population cannot be found unless it is done in a radical manner that revolutionises the very foundations of society. Such a radical change of society would have to be all-encompassing if one is to guarantee meaningful employment for all, the provision of healthcare, education, and housing, the proper protection of democratic rights, rights to dignity, culture, and the environment. The only historical path towards progress for humanity is that of socialist revolution. C) The historical impasse of Greek capitalism
Because Greek capitalism is the ‘weakest link’ within the Eurozone, it came the nearest to the precipice of bankruptcy. From the mid 1990s up until 2008, there had been unprecedented development of Greek capitalism, chiefly due to the availability of immense, and historically cheaper, credit that artificially fed consumption, particularly the construction industry through the thousands of mortgage loans that were made available. By 2008, towards the end of this period of ‘development’, Greek capitalism had secured for itself membership within the ‘club’ of developed Western capitalism, albeit, as one of its ‘weakest’ links.
The low competitiveness of this Greek ‘weak’ link is historically due to the failure of the Greek bourgeoisie to seriously invest in new technologies, and in research and development of industrial production. The recession in Greece broke out in 2008 as an expression of a global tendency in times of global crisis for the means of production to shrink.
The unprecedented depth of the recession that has struck Greece confirms the artificial and hollow character of Greek capitalism’s development in the recent period. However, it has also been aggravated by the attempts of the bourgeoisie from 2009 onwards to brutally extract further income from the masses in order to pay off the thieving state loans.
At present in Greece, we are witnessing the most severe programme of cuts ever seen in the capitalist world since the Second World War. The April 2012 IMF report on Greece states that a programme of austerity measures will be applied between 2014 and 2020 with the aim of creating “a primary surplus”; the level of cuts is analogous to those of the programmes applied in Romania between 1982 and 1989 during the reign of the Stalinist bonapartist Ceausescu and in Egypt between 1993 to 2000 during the reign of the bourgeois dictator Mubarak.
According to official figures of the Bank of Greece, the cumulative GDP reduction between the 4th quarter of 2007 and the 1st quarter of 2012 is close to 20 percent, creating large numbers of unemployed and poor. It is patently obvious that the extreme reactionary policies of the “Troika” (IMF-ECB-EU) and the government are exacerbating the recession, and that the terrifying cuts are provoking an equivalent drop in GDP.
The programme of severe austerity that has been applied to Greece over recent years is not a “mistaken prescription” on the part of the bourgeoisie. It is a concerted effort on the part of Western imperialists – both the lenders and the Greek ruling class – who know very well what they are doing. By labelling this attack on the living conditions of the masses a “depreciation”, they consciously admit that they are crushing the incomes of workers and the petty-bourgeoisie in order to service the public debt due to the thieving loans and also to secure future profits for the more powerful sections of the capitalist class.
Nonetheless, the fact that one country after another in the Eurozone is facing the spectre of being overburdened with debt proves that the impasse of Greek capitalism is simply organically part of a global capitalist impasse. The prospects of Greek capitalism are totally tied to the gloomy prospects of the European and global capitalist economy.
If European and global capitalism were capable of entering a period of strong recovery, there would be greater scope for a solution of the Greek debt in a manner that would not threaten the future of the euro and that would permit the re-stimulation of the development of Greek capitalism. However, in the current situation where the world economy is entering another global recession straight after the previous one, what is on the horizon for Greek capitalism is further bankruptcy and decline. D) Exit from the euro and the shockwaves across the Eurozone
There is a strong possibility of a Greek exit from the euro. However, this should not be viewed in isolation; rather, it should be looked at within the broader context of the crisis of European and global capitalism. The euro was established during a period of upswing of Western capitalism. In such a period, the feverish rise of capitalist profit-making provided the grounds for the most powerful sections of European capitalism – particularly German capitalism – to pursue the further economic integration of the EU around a single currency. German capitalism, facilitated by the euro, established its domination across the sizeable EU common/internal market, and further strengthened its position within the global economy.
Now, however, there has been a fundamental change in the situation with the profound recession that is spreading across the Eurozone that in turn is worsening national debt. Under such circumstances, Germany and, generally, the wealthier capitalist European North, would have to finance the debts of the South for years to come in order to retain the benefits of the euro. However, by doing so, North European capitalism would also be dragged down into recession. Consequently, the deeper the crisis becomes, the more unsustainable the current make up of the Eurozone becomes for the stronger sections of European capitalism and thus the more the euro is undermined.
Within the context of that process, Greece, being the ‘weakest link’ in the Eurozone, is objectively the most likely to be the first to abandon the euro. But it is not the only one. The dramatic worsening of the crisis in Spain indicates that the list of candidates is growing all the time, and this in turn leads to the prospect of a Eurozone with fewer members, a dramatic change in its current format or even of its complete break up.
To sum it up, the force that is pushing Greece out of the euro is the actual unfolding of the crisis of capitalism globally and particularly in the Eurozone. The deep recession in Greece – fed by the European-wide recession, and by the draconian measures of the ‘Memorandum’ – is an expression of the very same force that is pushing Greece in the direction of returning to a national currency.
It is short-sighted and incorrect to think that Greece’s exit from the Eurozone is unlikely simply because this is against the interests of the economically powerful in the EU. At the same time, it is absolutely true that it would be highly damaging to European capitalism for Greece and/ or other members to leave the eurozone. Apart from such an exit burdening states and banks with new debts, such a development would also cause the cost of borrowing to soar for all the “partners”, and would also push down the value of the euro on the global currency markets, thus destabilising the entire global economy.
That is why up till now the strongest capitalist countries of the eurozone, particularly Germany, have attempted to keep Greece within the euro at the least possible cost to them. This, however, has meant that the cost has been borne by the lower layers of Greek society, the workers and the poor. Undoubtedly, they are loath to see Greece or any other country abandon the euro. However, it is political short-sightedness to make assumptions about the economic prospects of capitalism based on what the bourgeoisie have on their wish list. Ideally, the bourgeoisie would not have wanted any recession at all. However, due to the contradictions of their own system, recession is inescapable. Similarly, the real tendency for a shrinking and undermining of the eurozone is not something they desire. However, as we have explained, it is very likely that the reality of the situation would force this upon them.
German capitalism, and that of other powerful North European states, is fully aware that the situation Greek capitalism finds itself in wall continue to worsen, with the internal conditions pushing towards uncontainable default and with the need for further loans in order to keep Greek capitalism artificially propped up. Therefore, at some point they would be forced to push Greece out of the euro, which, in turn, would set in motion the total undermining of the euro.
The return to a national currency under the conditions of capitalism would undoubtedly precipitate the devastation of the living conditions of the Greek working class. However, the dilemma of choosing between either the euro or the drachma is a false one. The return to a national currency would signal a new, acute stage of the crisis. There is no rational or practical reason why the working class and the poorer layers of society should be asked “to choose” between the current stage of capitalist crisis or the next stage. The only true political choice for workers is the following: either a programme to manage barbaric capitalism or a programme to overthrow capitalism with the prospect of building socialism.