Greek austerity comes to Scotland

t1larg.greek.protests.afpGeorge Papandreou, the Greek champion of austerity, arrives in Edinburgh today to address the TEDGlobal conference.  Elected prime minister on a social democratic platform, like his father and grandfather before him, he remains the head of the Socialist International, a position he has occupied since 2006.  But he surrendered his nation’s economy to the mercies of global finance, imposing the severest cuts on his own supporters, and was rewarded with an electoral wipe-out that would make Nick Clegg flinch.  In his own country, he is a pariah, an apologist for a gruesome experiment in economic cruelty. And more than ten thousand have signed a petition asking for his invitation to be revoked.

TED insists that Papandreou qualifies as an expert on economic reform. After all, who else has more vivid first-hand experience of the brutal necessities of power politics? For critics, he symbolises the betrayals of capitalist democracy, having signed his name to the greatest economic catastrophe of recent times. Papandreou can thus expect an entourage of angry protesters from Edinburgh’s Greek community, alongside anti-cuts activists who have made the connection between the bedroom tax and the far greater horrors of southern European austerity.

Of course, even Papandreou’s critics know he was not the true architect of the austerity disaster.  He was, at best, the patsy.  The real culprits are a global network of institutions, headed by the IMF, the EU and the European Central Bank, who represent the interests of faceless financiers. Nevertheless, Papandreou’s accommodation of these forces symbolises the tragic failings of modern social democracy.  Like Tony Blair before him, he implemented a disastrous and unpopular experiment in the face of all logic and evidence.

The Blair comparison is apt because in both movements there have been two strands, one idealist, one realist.  Some among the neoconservatives believed the Bush administration was sincerely interested in bringing peace and freedom to the Middle East. Others just wanted the oil. By analogy, some believe that the long-run effect of cuts and wage restraint will be a higher standard of living for all. Others just want to plunder the public sector. As with Iraq, the idealists have been exposed as frauds and dupes over time, while the realists are riding high.

All the evidence for the collective virtues of austerity is starting to unravel. In 2010, Carmen Reinhart and Kenneth Rogoff, two Harvard economists, wrote a paper arguing that economies with debt over 90 percent of GDP suffer a chronic lack of growth.  Its findings were established as the orthodox view on public spending, cited by the IMF, the Republican Party and George Osborne, among others. But when an American research student tried to replicate the results, he found a host of glaring spread-sheet and data errors, raising serious doubts about the paper’s credibility. The most convincing case for austerity thus rests on an Excel blip: so much for the idealists.

However, the “realist” case is going rather well.  The effect of austerity across the whole system has been a monumental transfer of wealth from the poor to the rich, unprecedented in human history.  The effect of recent “reforms” has been a radicalisation of the logic of neoliberalism.  It instils an animal struggle to impose risk further down the food-chain, so that the harshest effects are felt by the most vulnerable. Now over a quarter of Greeks are out of work, and youth unemployment is at nearly 60 per cent (by contrast, the rates in Scotland are 7.3 per cent and 16.6 per cent respectively). Economic output has been set back a decade and Greek society set back many decades, with rising fascist activity, especially in the police forces. Fear and panic, not reason, are the optimum emotional states for austerity.

TED argues that we should listen to Papandreou and implies that the protesters are interested in censorship. This is clearly a diversion. Censorship, in its proper sense, is the act of the state or of a public body, and nobody is calling for laws to stop politicians arguing for austerity. True, Papandreou might have something interesting to say (“sorry”, for instance). But it’s doubtful.  The protesters themselves, who have been driven from their homes by the policies inflicted by Greece’s political class, would be the most interesting voices on austerity. Sadly, they have been “censored”: they cannot afford TED’s $6,000 a head entrance fee.

TED is hosted in Edinburgh, but the $6,000 delegates might only be marginally aware that there is a referendum approaching in Scotland. Those of us who are participating in 2014 should be aware of TED, and the voice of Papandreou. He indicates that there are no logical limits to parliamentary betrayals, and that you never really get what you vote for. So far, our economic debate has been a disappointing rehash of orthodox ideas. Scottish Labour mimics British Labour, arguing for at best a streamlined version of Con-Dem policies without the bedroom tax.  The SNP – and Yes Scotland – have built their economics on a discredited supply side notion of corporation tax cuts, an idea derided as “voodoo economics” by the first George Bush.  We might be forgiven for thinking that neither party could move further to the right. The example of Papandreou says they can.

The science behind austerity is discredited. A planned alternative, with banks providing funding for socially useful causes like green energy, is preferable in every respect.  To ensure that politicians have some accountability to their supporters, we need a political movement that extends far beyond the range of parliamentary politics and national borders. It must be a protest politics, with a parliamentary arm.  Globally, collectively, the Left has made a tragic retreat from the international protest movements of the European and World Social Forum.  We must find this momentum again. A left wing economic strategy needs to mobilise the masses, it is not enough to give them the right messaging for the right candidate. And if we want a fair Scotland, we need to ensure that the Greek catastrophe does not go unpunished: as one Greek colleague told me, “Austerity in Britain looks like Greek austerity a few years ago.”

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  1. picpac67 says:

    Some good points, but a “protest politics with a parliamentary arm” would be a continuation of elective dictatorship, not democracy. The only way to make government accountable is to have a) a written constitution which sets out the limits to state power; and b) constitutionally assured popular rights of initiative, referendum and recall, including the right to challenge any legislation passed by parliament in a binding referendum if a prescribed minimum number of signatures of support is gathered; and c) a constitutional court to which appeals can be addressed.
    The continuing militarisation of the police and other state agencies, and the development of more sophisticated crowd control techniques, mean that governments are increasingly confidant that they can ignore and/or suppress challenge, as the responses to popular protests in Greece, the US, Turkey and elsewhere show.
    The best hope is that the corrupt capitalist system will collapse under the weight of its own contradictions. It’s almost there – but people have to be prepared for, even welcome, the inevitable austerity that that would bring; the difference being that out of the ashes new democratic structures and fair trade models could be created.

  2. Hetty says:

    Just wish that the idea of a corrupt capitalist system collapsing was real, for the better of all, but it’s more likely that the rich will cling on to their very very comfy lives to the death, at the expense of the planet, and the people and all of life, living here at the moment, sorry that seems very doomsday. But I wonder if it’s something we have to prepare for, taking control of the arable land and growing food is what I would propose…as a start.

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