European meltdown posted by Richard Seymour

Like ‘sex’ and ‘violence’, the words ‘Europe’ and ‘crisis’ seem to have a near permanent affinity these days. This constant conjunction tells us that the nature of the crisis is no transient thing. It is what Gramsci would have called an ‘organic crisis’, one that condenses multiple chronic problems at various levels of the system in a single, epochal spasm. Growth rates across the Eurozone are close to zero, unemployment is over 10 per cent on average – a figure masking extremes of joblessness in Greece and Spain. But it is not just an economic crisis. The Eurozone is a political creation, and it is at the level of politics that the strains are manifested at their highest level. Repeated sovereign debt crises threaten debt default, the withdrawal of economies from the euro currency and the ultimate collapse of that currency. The material basis for the European Union (EU) to continue to exist in its present form is endangered, and the solutions only seem to exacerbate the problem.

Labels: austerity, capitalism, europe, european union, eurozone, gramsci, neoliberalism, organic crisis, recession, ruling class

Scenes from the class struggle in Greece posted by Richard Seymour

Labels: austerity, capitalist crisis, class struggle, eu, europe, greece, left, militancy, neoliberalism, pasok, socialism, working class

Tories, Europe and political animals who cannot be domesticated. posted by Richard Seymour

There were merry guffaws when former British prime minister John Major incautiously referred to three cabinet members as 'bastards'.

This was in 1993, when European economic and monetary union was nearing the completion of its first stage. Right-wing Conservative MPs were then in rebellion over the Maastricht Treaty, which ratified the European Union. The weakness and division of the parliamentary party was obvious. With a majority of only 18 MPs, 22 backbenchers voted against the government.

Party whips were unable to contain the revolt with their usual mix of threats and rewards, because the rebels were confident that Major's leadership would not last long and that it would fall to them to save the Conservative Party. In that, they had the blessing of former leader Margaret Thatcher. Though the right reclaimed the leadership after 1997, they could not win an election. It fell to David Cameron, standing as a socially liberal 'One Nation' Conservative, to take the Tories out of the hard right ghetto.

Fast-forward to 2011, and Cameron's prospects look bleak. The backbench rebellion that took place in October was not over an outstanding Treaty issue. Its source was a parliamentary motion for a referendum over membership of the European Union, pushed by a number of right-wing MPs. These MPs must have known there was no prospect, even if a motion was carried, of Britain being withdrawn from the EU. The Tories' business allies would be the first to scream blue murder if this were on the cards. They can only have intended to hurt their leadership.

Labels: atlanticism, capitalism, eu, europe, petit bourgeoisie, reactionaries, ruling class, tories

On Utoya posted by Richard Seymour

‘The teenagers who gathered at Utøya that day could not imagine that they would be enrolled in the ranks of those murdered by the Right’

In a challenging new book, a collection of Australian and British writers respond to the terrorist attack by Anders Breivik, and attempts by the Right to depoliticise it.

On July 22, 2011, Anders Breivik, a right-wing writer and activist, killed more than sixty young members of the Norwegian Labour Party on Utøya island. Captured alive, Breivik was more than willing to explain his actions as a ‘necessary atrocity’ designed to ‘wake up’ Europe to its betrayal by the left, and its impending destruction through immigration.
Breivik’s beliefs – expressed at length in a manifesto, ‘2083’ – were part of a huge volume of right-wing alarmism and xenophobia that had arisen in the last decade. Yet Breivik, we were told by the Right, was simply a madman – so mad, in fact, that he had actually believed what the Right said: that Europe was in imminent danger of destruction, and extreme action was required.
On Utøya: Anders Breivik, right terror, racism and Europe is a response to this attempt to deny responsibility, and any connection of Breivik’s act to a rising cult of violence, racism, and apocalyptic language. The editors and authors shine a light on Breivik’s actions, and argue that they cannot be understood abstracted from the far Right racist and Islamophobic social and political conditions in which it emerged.
Organised, written and produced within three months of the killings, On Utøya is a challenge to anyone who would seek to portray this event as anything other than it is – a violent mass assassination, directed against the left, to terrorise people into silence and submission to a far-right agenda. It concludes with an examination of the manufacture of hate and fear in Australia, and considers what is needed in a Left strategy to deal with the growing threat of far Right organising.
Edited by Elizabeth Humphrys, Guy Rundle and Tad Tietze, with essays by Anindya Bhattacharyya, Antony Loewenstein, Lizzie O'Shea, Richard Seymour, Jeff Sparrow and the editors.

Labels: breivik, edl, europe, fascism, islamophobia, norway, racism, utoya

Greece on the brink posted by Richard Seymour

Labels: austerity, capitalism, class struggle, eu, europe, european left, eurozone, exploitation, greece, neoliberalism, working class

After Oslo: Europe, Islam and the mainstreaming of racism posted by Richard Seymour

Labels: anti-fascism, europe, fascism, islam, islamophobia, norway, racism, terror

Gramsci on Americanism and Fordism posted by Richard Seymour

Gramsci's discussion of Fordism constitutes one of his rare extended interrogations of hegemony and historic blocs outside of Italy, dealing as it does with impact of US ascendancy and American production methods on post-WWI Europe. There are parts of the analysis, concerning the regulation of the sexual instinct, which seem odd out of context, or perhaps even passe. But, though it would seem to have only conjunctural relevance, dealing with America's move toward a planned economy during the Great Depression, several aspects of the analysis are of enduring significance, not least because of the methodology they imply.

The basis of Gramsci's analysis was that Fordism represented potentially a new industrial-productive historical bloc. As an attempt to rationalise production and resolve the dilemmas of capitalism (particularly its crisis-prone nature) within the constraints of capitalism itself, it potentially represented a 'passive revolution' that would usher in modernization without violent social struggles. Fordism, by rationalising production and subordinating activities extrinsic to direct production, enabled products to be sold more cheaply, and workers to be paid a 'high' wage that enabled them to buy the products that they made. It became the paradigmatic model for the organisation of capitalism for some decades thereafter. Gramsci wanted to know just how much Americanisation was penetrating European production methods, and its associated cultures, and how much it was related to European fascism.

He argued first that Fordism was possible to implement in the US chiefly inasmuch as the US lacked the "vast army of parasites", that is classes with no economic function, the unproductive landed gentry, clerics and middle classes, who still predominated in parts of Europe. These parasites, depending on 'rents' and 'pensions' made available to them because of the continued existence of feudal forms and cultural norms (no family member of a canon could be associated with manual labour, for example), provided the basis for the reactionary form of resistance to 'Americanisation'. The US had benefited from a rationalisation of its demographic composition, the prolonged psycho-physical adaptation of masses of people to urban living, so that it was possible to introduce Fordism without provoking moral, romantic opposition from significant sectors of the population.

In the US, because commerce, trade and transport were 'subaltern' rather than primary forms of economic activity - because, in effect, the entire life of the country was being organised around industrial production - hegemony could begin in the factory, and didn't require much political or ideological mediation. In Europe, the still acuminous weapons of the old order - the appeal to craft rights, for instance - could be wielded against industrialism. Against the Fordist dreams of super-cities, complex, grandiose fantasies of future capitalist development, there was ruralism, the exaltation of artisanal life, idyllic patriarchalism, Catholicism, simplicity and sobriety. Advocates of the latter charged that cities were sterile and unproductive: "there is love but no generation, consumption but no production". Inasmuch as cities had a much lower birth-rate, these critiques were not wholly off the mark - and this fact was itself one of the factors constantly changing the terrain in which proletarian hegemonic struggles were taking place, because lower urban birth-rates tended to result in rural workers being sucked into urban environments to which they were not acculturated, or bringing in workers of different nationalities and 'races'.

Gramsci perceived Fordism as a relatively progressive tendency away from individualism and competition, toward planning and cooperation. The question was whether the working class itself would be able to take over this trend. Corporativismo, he said, existed as a movement, and the conditions existed for technical-economic change on a large scale. However, in Italy, workers were not in a position to either oppose it or take control of it. And because of the persistence of old social forms preserved by Fascism, the tendency would be for corporatism in the form of coordination between monopoly capital and the state to simply shore up the crumbling unproductive elements rather than eliminiate them. Fordism required a certain type of structure, a certain type of (basically liberal) state, and the elimination of the old rentiers.
But under fascism, the rentiers were being protected and proliferated, and more and more machinery was being elaborated to protect the old order. In part, this was necessary because the corporatist trend operated in a situation of mass unemployment. It thus depended on certain protections for the employed to sustain conditions that would collapse if there were free competition.

The relevance of morality, sex, gender and religious coercion comes in here because, as Gramsci writes, the new Fordist order required a particular kind of person. This is why Henry Ford's interrogations into the private lives of workers was so important. Ford wanted to be sure that the worker's private life was compatible with her working life, that she had really found a way of living that allowed her to efficiently reproduce her labour in its normal state every day. Such corporate paternalism was not just tyrannical and intrusive, according to Gramsci, but an attempt to answer a problem from a capitalist perspective that will be relevant to any attempt to create a rational social order. The regulation of the sexual instinct, of reproduction, of gender relations and of one's basic 'animality' is something which Gramsci thinks is necessary and historically progressive - citing the first such regulation when hunter-gatherer societies were replaced by settled agricultural communities. Here, he seems to be influenced by Freudian psychoanalysis. Gramsci's argument, though, is that moral and ethical changes which would in the past have been imposed by the despotism of the church and state, have to be undertaken on the initiative of workers themselves, or at least from within the formally 'neutral' terrain of the state. This is the only way to ensure their widespread acceptance and thus their efficacy.

But here he tends to contradict himself. He is sympathetic to feminism in one instance, resistant to sexual moralising. The next, he sees sexual openness in America as bourgeois libertinism, supports 'the family' and sees feminism as a 'deviation'. He makes some heavy weather of the idea that American workers largely backed the Volstead Act (Prohibition) - which is a hostage to fortune as it is both not wholly true and omits the impact of Christianity (rather than industrial rationalism) in galvanising support for the Act. In fact, Ford himself was very keen on preventing his workforce from being influenced by the growing sensualisation of culture, and eager to advance Prohibition and moral rectitude, which was one of the reasons for his attempt to build a little enclave of Fordist America in Brazil, known as Fordlandia. He also blames its downfall on the upper classes, whom he says is the only social group with sufficient money and leisure time to pursue drinking and free love. In light of some of his earlier writings, for example on socialist education, it's fair to say that Gramsci had a small-c socially conservative aspect to his outlook, which conflicted with his small-l liberalism, and undermined his critique of the bourgeois state and the Catholic church. He is, to his credit, critical of Trotsky's idea of militarising labour, but he also has an exaggerated worry about 'totalitarian' hypocrisy, in the sense that he believes that moral hypocrisy is principally a sin of moralising authorities under class societies, but could become general and thus only manageable through coercion in a classless society. That is to say, he worries that people will express formal adherence to sumptuary and sexual norms, but will not live them, or will consistently violate them. This seems to me to be an unanswerable fear, which isn't susceptible to disproof and can only be met with constant surveillance. There are other difficulties too. For example, Gramsci overstates the degree of rationalisation of America's demographic structure, thus missing the central role played by the petit-bourgeoisie in the reproduction of Fordist Americana. There's also no explicit approach to the issue of racism, antisemitism and anticommunism in the production of Fordist paternalism. The brutal anti-unionism of Fordist managers is discussed only in passing, in terms of the way in which horizontal solidarity between free trade unions is turned into vertical, factory-based solidarity.

Still, what is important here is how Gramsci approaches Fordism and its triumphs and challenges from manifold directions, attempting to assess every important, resonant aspect, as he sees it, of the 'historical bloc' that it comprised. He looks at the impact of wages, literacy, gender and sexual morality on reproduction, industry, political hegemony and left-wing political formation. Ideology, morality and culture are seen not as passive reflections of a dynamic economic base, but rather as formative, organising and shaping the economic base, allowing or inhibiting the process of rationalisation (or otherwise). Again, geographic variations and uneven development play a key role here, determining the pace of development and the morphology of the political terrain.

Fordism's decline has been exaggerated by theorists of post-industrial capitalism. Manufacturing and industrial capitalism retains a centrality to global production, even as its spatial dimensions and distribution have been radically altered. But let's say for the sake of argument that we operate in a post-Fordist historical bloc - that is a capitalism in which hegemony flows from the financial markets rather than the factories, and in which the whole of national and international life is increasingly organised around the model of speculation and debt. Using Gramsci's conceptual syntax, we could begin to theorise how its different aspects - wages and debt, cultural and spatial homogenisation (with specific regional configurations), sexual morality, gender and race, commodification, productive and distributive 'anarchy', etc., fit together. It would provide a productive way of dealing with socialist strategy on issues such as imperialism, sexism, 'culture wars' and immigration which don't lapse into a sterile 'politicist'/'economist' dichotomy - the sort of binary that results in the argument from a number of ex-New Leftists such as Todd Gitlin and Michael Tomasky that there's been too much emphasis on culture wars and not enough on 'class', as if class is a pristine category that is prior to and not lived through and composed by race, gender, culture, etc. As if neoliberal accumulation patterns don't (re)produce classes with particular cultural, sexual and regional dimensions that need to be central to left-wing composition. For my own purposes, it can help explain something about the strange, some time morbid and deadlocked, and apparently contradictory array of ideological and political forces in Britain. In particular an appraisal of neoliberalism as an historical bloc can help grasp the doomed, declining constellation of forces behind Tory England, their deep hatred for Cameron, their resentment of European infringements on the sovereign nation-state fetish, their abortive attempt to stop EU migration, and their thus far failed (but far from finished) attempt to mobilise a broad coalition behind the idea of containing Islam, supporting the troops, and preventing the dilution of 'Britishness'.

Labels: americanism, capitalism, culture, europe, feudalism, fordism, gramsci, hegemony, historical bloc, morality, socialism, socialist strategy

Europe, immigration and the Right. posted by Richard Seymour

Labels: capitalist crisis, eu, europe, immigration, multiculturalism, neoliberalism, racism, reactionaries, socialism, white working class, working class

Neither Germans nor Jews (but international socialists) posted by Richard Seymour

Labels: colonialism, eurocentrism, europe, islamophobia, kulturkampf, leitkultur, multiculturalism, new racism, racism

Moving On from Zizek (or not) posted by Richard Seymour

I agree with those who say we should move on from Zizek.  And I would have nothing more to say about this debate, if people would stop defending Zizek on utterly spurious grounds.  However, I have had my ear nipped by a number of people who want to challenge my recent criticisms of Zizek, and the sheer irrationality of the defences offered is jaw-dropping.  On Twitter, for example, @khephir argued that Zizek was not attempting to vilify gypsies, but to “immanentize” them.  Asked if the specific claims about gypsies were correct, @khephir replied that “looking for truth in argumentation” is “silly”.  The claims about gypsies being thieves and murderers are “rhetorical”, not “critical or exhaustive”, and anyway “we’re all thieves and murderers”.  If you’re not laughing, you need to pinch yourself.  There’s others, but I’ll spare you.

More seriously, though in my opinion not much more seriously, the blogger ‘Sebastian Wright’ has engaged in a critique of my overall criticisms of Zizek, which he attempts to read symptomatically in light of the SWP’s politics of anti-racism, with which Sebastian has differences.  He alleges that after I started to criticise Zizek when he made what I thought was an appalling argument about the ‘Danish cartoons’ bullshit (sorry, ‘controversy’), I have “operated via a single strategy: take Žižek’s reflections on a subject, from whatever angle they might be, and simply shout them down with charges of racism: a kind of rhetorical ‘nuclear option’.”

Hot crackers, I take exception to that.  I don’t go around baselessly accusing superstar philosophers of racism.  Where I have accused Zizek of engaging in racism, I have dealt with specific examples, providing details and argument.  In this specific instance, I simply ask: are Zizek’s claims about the gypsies, and specifically the Strojan family, true? Is he merely stating a well-known truth, something which the politically correct brigade is trying to suppress, or is he fabricating, lying egregiously? The answer is that it’s the latter.  I find no evidence that the Strojan family are car thieves, and they didn’t murder anyone.  It is true that locals blamed the Strojan family for a number of thefts, but it’s also true that they acknowledge when pressed that the Strojans have been scapegoated on this issue. So, what Zizek said wasn’t true and, pardon me, he had no good grounds for claiming it to be true. Did Sebastian bother to check this before reflexively leaping to Zizek’s defence? No sign of it in this post.

Next question: if it wasn’t true, then why would he say it? The context is that he’s denying, or at least putting in serious doubt, the idea that the pogrom against the Strojan family was racist, and that the mob itself was racist. He puts this charge in scare quotes. He’s trying to explain the terrible burden of living with a gypsy family nearby, in order to give a real, material pretext for the violence. I do not say that he cheered on the violence. I was quite specific about this.  He championed the mob and its ‘legitimate grievances’ – a familiar technique of right-wing tabloids and shock-jock commentators.  He’s acting as an advocate for the poor, ordinary guy whose son comes home beaten up by gypsies, and who lashes out in grief. So his fabrications – and they are fabrications – are an act of apologia.

Third question: can such allegations be separated from the racist discourses about gypsies that are current in Europe, and particularly in Slovenia where this pogrom took place? These discourses have long depict gypsies as anti-social thieves and killers.  Such was a key component of the ideological basis of the Nazis’ extermination programme. These discourses scapegoat gypsies for real social problems – there is theft and murder and anti-social behaviour as a matter of course in all capitalist societies. They Other the gypsies, making them appear as an alien intrusion in an otherwise cohesive, integrative society.  In Slovenia, there are over ninety gypsy settlements.  Gypsies have long sought legal normalization, an end to segregation in schools, an end to de facto segregation in access to property, infrastructure, running water, and that sort of thing. The discourses which dehumanise them as anti-social, a burden, thieves and killers, aside from just happening to rely on anecdotes which – where they can be checked – prove to be untrue, blame gypsies for this appalling state of affairs, and validate their racial oppression. Zizek’s specific claims, aside from being untrue, and hitched to an unjustified apologia for a racist mob, are inseparable from these wider discourses from which they were undoubtedly culled.

It is so important to get the facts right about this, as the consequences could not be graver.  The demonisation of gypsies is liable to get someone killed – how’s that for a rhetorical nuclear option?  In light of this, to refer coyly to “real antagonisms” just isn’t good enough.

***

I am also, as part of this wider critique, misrepresented over the Danish bullshit: “Seymour simply asserts that cartoons lampooning Muhammed are racist, ergo any attempt to think the reaction to them as anything more than justified rage against an obviously evil act of injustice is also racist.”  Those of you who spent time on the blog during that disgusting fiasco will remember that I was prepared to be quite boring on the subject.  I went into some considerable length and detail, through a number of posts, explaining why these specific cartoons (not just any old cartoons lampooning Muhammad) were racist.

The cartoons collectively drew on a series of essentialising tropes about Islam that have nothing to do with the facts of Islam, but which have everything to do with the demonisation of Islam. These held that Islam is, from is inception, a doctrine of violence, fanaticism, and the oppression of women. It so happens that this isn’t true.  The cartoon about the virgins for suicide martyrs, for example, reproduces with a commonplace idea held about Muslims and their beliefs among Europeans and Americans.  But it is not based on anything in the Quran or the Prophetic Tradition. These are tropes which became important to colonial pedagogy because of the encounter with Muslim resistance to empire, in Indian in 1857, in Egypt in 1882, in Sudan in 1898, in Iraq in 1920, and so on.  In each of these cases, resistance had to be explained in terms that did not reference the injustice of imperial predation. It was therefore explained in terms of, among other things, Mahometan fanaticism and a propensity toward violence.

“Imperial feminism” in the same era depicted colonised male subjects as being inherently more barbaric in their treatment of women.  In practise this conviction, which was propagated by the likes of colonial administrator John Stuart Mill and perpetuated by conservative, bourgeois feminists, weakened the struggle against female oppression in Europe. It formed part of the advocacy for empire, as in Mill’s famous arguments, after the 1857 uprising, for the East India Company’s progressive social role in India.  So, the treatment of Muslim males as being inherently more barbaric in their treatment of women has a pedigree, and its function today is not dissimilar to that of its original formulation.

The soliciting and repeated publication of these cartoons, the refusal to acknowledge diplomacy for months before there was a single protest, and the desperate attempts by newspapers to provoke a reaction by talking them up before there was a reaction, is obviously not separable from the context of the ‘war on terror’ and the civilizational narratives that have moralised and rationalised its prosecution. So, again, I charge racism on very specific grounds that the implied depiction of the subject is false, Othering, and is part of the means by which their oppression is validated and perpetuated. Sebastian may disagree with this.  But no one, certainly none of Zizek’s defenders, has been willing to engage with the argument on its own level.

Sebastian also alleges that my position on the Danish cartoons logically entails that the “reaction to [the cartoons]” doesn’t deserve real anatomisation.  Any attempt to read into them more than a reaction to injustice is written off as racist, he avers.  This is not so.  I am more than happy to countenance an analysis of protests against Danish cartoons which suggests that they are more than a protest against an injustice. Arguably, other dynamics included the willingness of US client-states to allow people to vent steam over the issue.  But it is unreasonable, putting it no more strongly than that, to write off any injustice without proper consideration of the issues. Further, as I argued, Zizek is not plainly equipped to carry out such an anatomy. An important part of his argument was that Muslims were targeting Denmark despite its being a haven of tolerance, despites its efforts to be open to all races, creeds and cultures. But those who follow these sorts of things knew that this was false. Denmark was never the epitome of tolerance, and certainly neverparticularly tolerant of its Muslim minority.  And unfortunately, when Zizek comes to explaining what the protests are “really” about, he falls back on a crude, essentialist analysis of Islam and its texts, which bears the same relation to Islam and its believers as Raphael Patai’s work does to the ‘Arab mind’.

***

Lastly, the symptomatic critique holds that the SWP is trying to uphold a liberal anti-racism, in its efforts to defend oppressed communities in the UK, and that my position on Zizek’s outbursts on the gypsies amounts to nothing more than a defensive  This ‘liberalism’ is chiefly expressed in, whisper it, “permanent united fronts with Tories, right-wing Muslim groups, and so on”.  This works by conflating a tactic, the united front, with an ideology.  It also conflates specific work on combatting fascism, with wider anti-racist work and output.  The SWP’s position on fighting fascism is simply that it will work with whoever is opposed to fascism.  In Unite Against Fascism (UAF), this unites a part of the Labour Left, some of the trade union bureaucracy, mainstream Muslim groups, Jewish anti-racist organisations, the SWP and independents.  We are open about our politics within UAF, but we don’t expect everyone else in that organisation to share our perspective.  The Tories’ only involvement to date involved David Cameron signing the UAF’s founding declaration.  I make no apologies for the fact that Cameron felt that he had to associate himself with this campaign.  As for the SWP’s position on the short-comings of ‘multiculturalism’ and liberal anti-racism, this has been outlined in the journal, in the newspaper, and at public events.  My view, stated plainly, has been that the neo-Powellite revival of racism has operated partially occupying some of the ideological terrain mapped out by official multiculturalism.  Our analysis of racism is unapologetically marxist, our response based on that marxist analysis.  But if it’s true that in my criticisms of Zizek I am basically upholding the SWP’s politics of anti-racism, then those politics would seem to be validated here. They certainly have a clear political advantage over any position which perpetuates malicious, racist falsehoods, in a context in which the perpetuation of those falsehoods is actually lethal.

Labels: anti-fascism, anti-imperialism, anti-racism, antifascism, colonialism, europe, gypsies, islam, islamophobia, racism, unite against fascism, zizek

The Tories, British nationalism, and Europe posted by Richard Seymour

Labels: capitalism, david cameron, eu treaty, europe, european union, neoliberalism, petit bourgeoisie, the meaning of david cameron, tories

Autumn of discontent posted by Richard Seymour

Motions tabled for the Trade Union Congress (TUC) conference in Manchester next month call for co-ordinated action by unions including the Public and Commercial Services Union (PCS), Unison, the National Union of Teachers, the National Union of Rail, Maritime and Transport Workers (RMT) and the Fire Brigades Union (FBU).

Unison, Britain's biggest public sector trade union with 1.3 million members, has called on unions to join a Europe-wide day of action in September.

It said the TUC should back the European Trade Union Confederation's planned European Day of Action on 29 September, which will include a rally in Brussels timed to coincide with a meeting of European Union finance ministers.

This is a start, but it has to be the start of something far bigger. The idea of Europe-wide action is excellent, long past due, but a proportionate response to this ruling class offensive will have to involve more than single day actions.

Labels: capitalism, europe, jobs, militancy, neoliberalism, right to work, ruling class, spending cuts, tories, trade unions

Europe and its intellectual property posted by Richard Seymour

Labels: 'war on terror', alberto toscano, capitalism, enlightenment, europe, fanaticism, imperialism, native fanaticism, the liberal defence of murder

Wither Europe posted by Richard Seymour

Perry Anderson's assessment of European monetary union, in his typically ecumenical The New Old World, was that its results were "inconclusive" but thus far "disappointing" on its own terms. Its benefits, including lower transaction costs and more predictable returns for business producing more investment and superior growth, had been vastly oversold. Growth, far from taking off, initially slowed and only recovered modestly between 2004 and 2007. But something started to take place in late 2007 that has made Anderson's provisional assessment look blithely optimistic. We all know what that something is, and it disclosed some hitherto unseen aspects of the 2004-7 'boom'. It was based on a massive expansion of public and private debt (the former concealed by accounting boondoggles), especially in new entrants to the Eurozone, based on deceptively low rates of interests. This was what funded consumption during the boom for those countries. Germany, as the major exporter with a sizeable current account surplus, was the major beneficiary of this consumption boom, as befits its restored role as a regional hegemon since reunification. This is one reason why the Merkel government's affected astonishment at Greece's fiduciary improprieties has always reeked of hypocrisy.

Now the Eurozone has agreed on a 'rescue' package to reassure the holders of Greek bonds - the biggest holders are in France, Germany and Switzerland, though the UK's stake is not inconsiderable - that if anything seriously bad should take place in Greece, the EU powers will intervene. Essentially, it's a bailout package for bond traders based in the Eurozone core and, as it must be unanimously agreed upon by Eurozone members, it has an inbuilt veto for the larger powers, specifically Germany which would contribute the most of any European state. Much has been made of talk of rescue plans. It is often said (eg) that such would contravene a no-bail-out clause (article 104b) in the original Maastricht Treaty which paved the way for monetary union. Thus, perhaps, the abdication of rules originally conceived for a very different kind of political-economic conjuncture demonstrates some potentially fatal fault lines in the project of monetary unity. But if you look at the report of what has been agreed and compare it to the Treaty, I suspect you'll agree that a tort lawyer would have no difficulty interpreting the rescue package as a legitimate activity under article 103a, section 2. There are serious structural tensions within the EU, but there is no reason to doubt the legal adroitness of those who framed this latest agreement, nor their commitment to sustaining union in its original format. It's not as if they have a blindingly obvious alternative at the moment and, if overall growth in the Eurozone has been unimpressive, the arrangement has nevertheless profited Europe's larger powers.

In a highly recommended read, Costas Lapavitsas (et al) [pdf] note that the leading would-be creditor, Germany, has benefitted from the uneven way in which financialisation has taken place across Europe. It has been able to squeeze its working class harder through various reforms to benefits pushed through by Schroeder and Merkel, without bringing about the elevated household debt of other EU countries, principally because other countries purchased German products and thus sustained economic growth. In the mid-2000s, Germany was the world's leading exporter (China took over last year). Peripheral economies have been bound by the tight fiscal rules of the Stability and Growth Pact, and thus have not been able to support production and growth to make up for the competitive gap with bigger economies. They have had to make up for competitiveness in other ways, principally by following the prescriptions of the European Employment Strategy, which mandates a flexible labour market and an increase in part-time, temporary work. Thus, workers have been squeezed across the board - albeit in different ways and at different tempos depending upon social and political histories, and the capacities of national working classes to resist. With such downward pressures on wage incomes, the only way to sustain growth for less competitive economies has been to drive up household debt to support expanded consumption (or in the case of Ireland and Spain, to stimulate real estate bubbles). Because German consumers were not as debt-ridden as their other European counterparts, it was less urgent for the German state to engage in stimulus spending, thus it has not had to borrow as much. That has driven up the gap between the cost of borrowing for peripheral economies and for the German government, which leads us to the sovereign debt crisis.

The sovereign debt crisis that now affects Greece and other peripheral Eurozone economies resulted from a speculative attack that in other circumstances would have focussed on the national currency. Speculators drove down the buying price of government debt, thus driving up the yield (the difference between what the government would receive from creditors and what it would pay back), and effectively raising the cost of borrowing for the Greek government to prohibitively high levels. That raised the prospect of future speculative attacks on other Eurozone economies, including the UK which - because of depressed tax revenues and high household debt - has had to borrow massively to sustain consumption even at its currently unimpressive levels. And the threat is not over. For example, many big banks have a major interest in Greece defaulting on its debts because they've been getting 'innovative' again. This innovation involves the use of credit default swaps, which is an insurance taken out against a debt that you hold if you think the debtor might default. It amounts to a bet that they will in fact default. (You can then make derivative bets on the providers of those credit default swaps defaulting, and further bets on those...). Throughout this crisis, the value of credit default swaps on Greek bonds has soared and soared, and they have actually increased two points after this announcement. Talk about perverse incentives - the rentiers have found yet another way to make big money out of catastrophic economic collapse.

As Lapavitsas et al also note, the current disposition of EU ruling classes, despite grumbling about German pressure, is to solve this problem with another attack on the working class - reducing public expenditure, cutting wages and raising taxes. Such austerity measures can be imposed precisely by such means as the 'rescue' plan mentioned above, which provides credit at reduced cost in exchange for substantial EU surveillance of the Greek state, and a commitment to the most devastating cuts package. This will further advance a race to the bottom as far as wages are concerned, with the peripheral economies having to hammer wages (and combat working class resistance) particularly vigorously in order to make up the current accounts deficits.

The recently integrated economies of eastern Europe, which have been pioneering flat taxes and enticing producers such as Peugeot and Volkswagen with low production costs (Anderson points out that wages in the auto-industry in Slovakia are one-eighth of what they are in Germany), are in an impossible position in this respect. How can they drive down wages any lower? How can they cut the state down any further? And if they do, will not their workers take advantage of the EU's relatively liberal internal migration regime to seek higher wages elsewhere? They have already been suffering from sometimes severe political instability, and explicitly fascist movements are doing very well in Hungary, Romania and Slovakia (by contrast, radical leftist challenges in the east are emerging belatedly, and only germinally). The political leaderships they have elected have often been not only embarrassing for the EU but actually obstructive, cf Poland's terrible twins. The anti-EU backlash coming in recent years from both right and left across Europe, is likely to accelerate and will be particularly advanced in the east.

Thus, the rescue plan might save the holders of Greek debt from undue pain (and who could object to that?), but it is part of a process and a political programme which is even now generating the basis for an almighty rupture in the EU. The debased utopia of a social liberal Europe of perpetual peace and prosperity, once fervently advocated by New Labour idiotologues, now looks more unworldly than ever. The EU is an accelerating centrifuge, and it surely cannot be long before some of its constituents start flying off in various directions.

Labels: capitalism, europe, european union, neoliberalism, strikes, trade unions, working class

Friday Night Fry posted by Richard Seymour

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Allied turf wars posted by Richard Seymour

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