It’s a rich irony that austerity, that economic medicine now being force-fed to the Greek population, has as its root the Greek word for astringent, or drying. And that’s exactly what’s happening – the Greek people are being hung out to dry. They are not taking their medicine quietly. Running battles with riot police outside the parliament building, along with petrol bomb and stone-throwing have heralded a new and more violent phase of resistance. When you read through the list of measures that the Greek parliament is being urged by the troika (The European Central Bank, the International Monetary Fund, and the European Commission) to adopt, it’s not hard to see why. When you tot it all up, and throw in the cash consequences of the withdrawal of public services, Greeks are being asked to accept something approaching a 50% cut in their living standards within three years. And that’s on average. For very many individuals and families, the austerity means destitution, pure and simple.
Imposition of impoverishment on this scale is likely to prove simply politically impossible. Be that as it may, it is necessary only in the sense that if Greece is to remain in the European capitalist club, playing by the rules it has foolishly allowed itself to adopt as its entrance ticket, it must repay its creditors or else default. It is claimed that the latter course will be even worse than the current austerity, but that is only true if the default is on terms permitted by the other members of the club. Their terms have nothing to do with Greece’s well-being, and everything to do with their own club membership. A club that in turn is only attractive within the context of globalisation, where the European powers are deluding themselves into thinking that they can play alongside China, India, and the United States as equal global players. If that is really what they intend, it has to be done in the context not of monetary union, but of political union.
The eurozone members of the EU are stumbling haphazardly to that very outcome. If eurobonds are issued, and European debt is pooled, that de facto means that the eurozone countries are in effect a single fiscal and political country. But what then? I do not believe that even a politically and fiscally unified eurozone can ultimately compete with China and India over the next 50 years and more. The old economies, including I suspect the US, have effectively shot their bolt. They no longer have the capacity to compete unless they compete on labour costs. The idea that in some way the old economies will become high value “knowledge” economies whilst the rest of the globalised world supinely accept their role as manufacturers to their intellectual masters is both abhorrent and ridiculous.
The inexorable capitalist logic is unfolding as it must. That does not mean predictably, but it does mean that because capitalism’s growth requires a surfeit of cheap labour, cheap labour must be found. The West no longer has such a surfeit, unless it can make its labour cheap. And that, I believe, is what the Greeks are now experiencing. They are the unwilling vanguards of the cheapening of Western labour. Slashing their citizens’ living standards by 50% is nothing if not a bold step on that road.
The root cause of the current crisis is globalisation itself, no matter that it is still being touted as the cure. By organising the economies of the entire planet into one single financial game, we are ensuring that problems in one place will have consequences everywhere. There are no longer any firebreaks, no way of containing financial crises within one area. Capitalism, having matured in the Western economies, now needs free access to the immature economies to feed its engine, and globalisation is the necessary means. As ever, capitalism enriches the few on the proceeds of the labour of the many. And so, even as the mass of the Greek people are howling in protest at the imposition on them of a poverty designed by the rich and powerful oligarchy of the troika, the logic is clear. Most people are destined to become poorer, as a relative few become ever richer. It remains to be seen whether this can be achieved in a democracy. For how long will the turkeys’ reluctance to vote for Christmas be tolerated? What, in Gavin Hewitt’s pithy phrase, “happens if a eurozone country refuses to take the medicine?”