Economic relations clarify politics
just as politics can return the favor. In truth, it is impossible to fully
understand one without an understanding of the other, and especially without a
grasp of their inter-relationship. No doubt that explains the wisdom of the
classical economists (and Marx and Engels) in describing their studies as
“political economy.” Similarly, the failure to systematically integrate the two
social domains explains the frustration of the modern-day academic economists,
even Nobel laureates, who fume about the politicians standing in the way of
their ready solutions to the current global economic crisis.
A case in point is the most prominent
economist/pundit in the USA, Paul Krugman. Not to call out Krugman—most others
share his frustration with US and European policy-makers—but his prestigious
podium in The New York Times
certainly makes him a handy target. Both in the recent pages of The New York Review of Books (jointly
with his wife) and in his New York Times
column, Krugman has turned to the political
roadblocks standing in the way of his proffered “recovery.” Until recently,
Krugman has simply repeated his prescription for recovery again and again. But
now—like the Biblical Paul on the road to Damascus—Krugman has had a blinding
flash of recognition. In his case, it's the maddening recognition of the
political dynamics intimately tied to changing economic policy, the backward
politics of political factionalism.
Undoubtedly part of Krugman’s (and other
liberals like Robert Reich’s) new-found acknowledgment of the political
dimension is the fast approaching Presidential and Congressional election in
the US. While they are right to see much at stake, they will assuredly be
disappointed with the policy options huckstered by the candidates of the two
Economic crises not only clarify, but
they expose politics. As we move deeper into a seemingly intractable global
economic crisis, the political landscape is revealed to show clearly where the
class interests of the various parties and alignments reside.
And what is exposed is neither pretty
nor promising. It would be foolish to think that over forty years of building
and strengthening a neo-liberal consensus would arm existing political
institutions with the means to tackle a crisis of almost unprecedented
ferocity. It borders on insanity to believe that a policy toolbox crafted from
a long period of stability and smug confidence in capitalism would be adequate
at a time when the foundations are collapsing. Yet, that foolishness and
insanity is what we have in 2012.
A long period of relatively crisis-free
development in Europe and the US after World War II sapped Left and Communist
Parties of their radical and revolutionary fervor. As mass confidence in
capitalism’s promise and sustainability grew, anti-capitalists retreated into
parliamentarianism and reformism. At the same time, bourgeois parties—the
parties of capitalism—drew ideologically closer together, first around a modest
Keynesian welfare state and then, after the severing of the post-war social
contract and the subsequent fall of Soviet and Eastern European socialism, around the neo-liberal agenda. Politics in
Europe and the US evolved into an ever-tightening circle of economic consensus
celebrating the supremacy of markets and the meager social justice compatible
with capitalist accumulation. Bourgeois parties embraced unfettered capitalism
and individual self-reliance, differing only on the pace of privatizing and
dismantling former social safeguards. And radical parties, even Communist
Parties, “mutated” or dissolved in order to be included in the tightening
circle of common ideology. In the US, the two dominant parties competed more
and more over the same terrain, limiting differences mainly to life style and
cultural matters. In Europe, multi-party parliamentary systems were evolving
inexorably into the two-party charade so well established in the US.
To the surprise of many, this happy
festival of capitalist triumphalism was rudely interrupted by a global economic
crisis of an intensity unseen since the early decades of the last century.
Unfortunately, the left is as ill equipped to address this crisis as are its
After nearly four years of relentless
economic instability and severe pain for a growing majority of the citizenry,
surely it is time to question the viability of capitalism. With all signs
pointing to another severe relapse amplifying the destruction of the 2008-2009
collapse, certainly the idea of a radical departure from capitalist social and
economic relations is in order.
But to address the crisis, we must move
dramatically away from the thinking that characterized the post-war “golden
age” of capitalist development, an era that seduced the US and European left
into the comfortable bed of class collaboration and reformism.
Some view the electoral turn in Europe
to the “socialists” of Francois Hollande in France or the strong parliamentary
showing of the SYRIZA coalition in Greece as a sign of a left rebirth. Many,
both in the amorphous, ideologically muddled US left or with the European
Green/pale-red parties, place their hopes in this development.
Events will show
this to be a false path, a path that invests in attempting to prop up the very
system that has rained destruction, poverty, and pain on the vast majority of
the world’s population. Certainly Hollande’s election and SYRIZA’s strong
showing in Greece mean something. They represent a first attempt, a cautious
and tentative attempt, to move away from the rigid discipline of markets and
financial fealty. They represent the timid and fearful votes of a broad and
self-satisfied middle stratum that, despite its profound injuries from the
crisis, still harbor hopes of returning to the pre-crisis era. They express the
false promise of a painless process that presumably will rein in predatory
capitalism by negotiation and reasonableness. And, tragically, they represent a
dead-end road leading to even further devastation of living standards and
increased unemployment and poverty.
From the perspective of the ruling
classes, the ascendancy of the French socialists and SYRIZA in Greece signals
the passing of the baton to new forces with a mandate to manage capitalism (Just as the Obama candidacy signaled a similar passing in 2008).
Their electoral successes point to the recognition that a new direction is both
desired and warranted, though one that remains securely in the capitalist camp.
In the words of Giorgos Marinos, a leader of the Communist Party of Greece, “… the reformation of the political scene
is being promoted which is supported by the bourgeois class, the European Union
and other imperialist mechanisms to more effectively manage the capitalist
crisis in capital’s favor, to impede the class struggle…” As long as much
of the left in both Europe and the US fail to see this, they turn away from any
real exit from this profound crisis of the capitalist system.
Both Hollande and his socialists as
well as SYRIZA propose to refuse the austerity medicine demanded by central
bankers, international lenders, and EU politicians and, instead, focus on
economic growth in France and Greece. While this proposal may have resonated
with voters, it will never advance beyond a mere campaign slogan. It can’t.
To believe that austerity can simply be
willed away is foolish or disingenuous. The austerity imposed in Europe is an
economic imperative driven by the weaknesses of the European Union that allow
predatory capitalism to exploit the most vulnerable of the Union’s members.
Finance capital is the enforcer of this austerity and finance capital must be
brought to its knees to escape the austerity. There is nothing in the French
Socialist program or the SYRIZA platform that even hints at how this could or
should be done.
Austerity has a political dimension, but
at its heart it is both an economic mechanism to restore and expand
profitability and an expression of the economic dominance of financial markets.
To not grasp this point, to not understand that austerity emanates from a
source deep in the capitalist system, is to have failed to draw any lessons
from the last four years. Only a frontal assault on capitalism, a program to
dismantle an economic system that invariably concentrates greater and greater
wealth into fewer and fewer hands, answers this challenge.
Already, before the celebration of the
Socialist Party’s sweeping victory has even expired, financial predators are
focusing on France. Officials are warning of a “debt spiral,” while others in
government are nervously reassuring financial markets that France will meet its
deficit goals. One financial expert quoted by The New York Times noted:
“So far the markets have been kind to France… but…France remains ‘the lucky
peripheral.’” Not for long. And the Socialists have no answer.
Escaping the Debt Dilemma
It is no exaggeration to state that
effective political responses to the crisis have yet to mature sufficiently in
the US and Europe. Conservative and social democratic forces dominate the
political landscape, while showing no program to escape the clutches of finance
and monopoly capital. This undoubtedly will change as these capitalism-friendly
parties fail to turn away the capitalist onslaught.
In Europe, principled revolutionary
parties like the Greek Communist Party (KKE) will win more and more Greeks and
Europeans to militant anti-capitalism and breathe life to the socialist option.
They offer an answer to the debt dilemma.
During the most recent Greek parliamentary
elections, the KKE was the target of a scathing attack for refusing to join
with SYRIZA in a potential coalition government. “Leftists” in Greece, as well
as outside the country, dishonored the party’s independence and trampled on its
principles with irresponsible assaults on its position. Greek Communists
adamantly refused to cooperate with a government that would both seek to
preserve capitalism and fail to safeguard the interests of working people.
History will show this stand marks the way forward, despite the electoral
losses spawned by fear and confusion.
In the US, dismal two-party politics
continues to grind down working people with no respite in sight. Both parties
vie for and receive campaign money from the financial sector and the other
major monopoly corporations. Both parties will duly reward this generosity.
Once again, as in the run-up to the
2008 election, the financial sector is pouring money into the Obama coffers (at
a pace even greater than in the earlier campaign). And despite campaign
rhetoric and the predictable liberal fear tactics and apologia, he will, once
again, live up to the expectations of his campaign donors. The next five months
promise an orgy of media spending on Orwellian images and slogans. No answer to
the debt dilemma and the global crisis will come out of this low drama. Ironically, prominent liberal economist, Robert Reich concedes as much in a recent post on his website. Faced with abysmal economic data and the threat of a perceived bad economy to Obama's re-election prospects, Reich argues that there is little the administration could do to change matters: ironic and pathetic
As in Europe, a peoples’ answer will
come with the emergence of an anti-capitalist advocate for socialism, a
Communist or Workers Party, a formation that challenges the core of capitalist
social and economic relations. Giorgos Marinos of the KKE says it succinctly
and well: “There are more than enough
forces to manage the system. What the people need are real communist parties
that will not manage the capitalist barbarity in the name of the “government
left” and in the name of “realistically” accepting the negative correlation of
forces. In this way you pave the way for the forces of capital and precious
time is wasted, for which the working class and the popular strata will pay a
Yes, working people are paying a high
price and we need to get on with the business of giving the people real