Calling Syriza far left hides the extremism of the far centre

From the Guardian to the Financial Times, from the BBC to the Daily Mail, from Reuters to the Daily Telegraph, the mainstream media is united on one point; the likely winner of the Greek elections on Sunday, Syriza, is a ‘far left’ party. In keeping with the extreme image and hotfoot from page 2 of ‘The Book of Journalistic Clichés’, Syriza’s leader, Alex Tsipras, is invariably labelled a ‘firebrand’.

But after you have traversed excursions into Syriza’s roots as a radical left coalition, you brush up against an inescapably dissonant fact. That what Syriza is advocating is not ‘far’ or extreme in the slightest, but moderate, humanitarian and sensible.

Here’s is a list of Syriza’s ‘far left’ policies, culled from a Guardian article. The party wants to supply free electricity to people who have been cut off, give health insurance to the uninsured, food stamps to children and homes to the (legions) of homeless. In addition, Syriza is determined to massively reduce Greece’s euro debt of €320 billion and cut interest payments, urging an international conference debt relief conference, akin to the one that slashed West Germany’s war debt in 1953. Syriza wants to decrease the tax burden on ordinary Greeks and increase it on corporations. (Corporate income tax in Greece, it should be noted, was scythed in half, from 40 to 20%, by the ‘centre-left’ Pasok party in 2001, the year the country joined the Eurozone).

“There is nothing radical, much less revolutionary, in these policies,” said Greek economist Costas Lapavitsas in December. “They represent modest common sense and would open a fresh path for other European countries.” Syriza itself claims its policies were “standard fare” during the Golden Age of capitalism in the 1950s and ‘60s. “Instead the leftwingers argue that the centre of gravity in politics has shifted so much to the right since the advent of Thatcherism that the party’s proposals now seem radical,” writes one journalist.

And it hasn’t entirely slipped under the radar that Syriza’s policies are eminently sensible. “At the core of Mr Tsispras’s economic platform is debt relief, an idea so unthinkable that nearly every mainstream economist has advocated it,” noted the Financial Times rather sarcastically earlier this month. The pro-globalisation economist, and former European Commission advisor, Philippe Legrain, has come out in favour of a Syriza victory, lauding such an outcome as a “necessary step toward resolving a crisis that has been festering since 2009”.

But still the epigram ‘far left’ is not given up, and not because of lazy journalistic habit. Mainstream commentators must brand Syriza as far left in order to maintain the fiction that the centre itself is not extreme. It was, after all, the political centre that inflicted the current sadistic penance on Greece, an austerity package that has resulted in GDP contracting by 25%, wages falling by a third, and unemployment of 26% and above. “The human cost has been immeasurable, amounting to a silent humanitarian crisis,” says Lapavitsas. “Many families scrape by on seniors’ slashed pensions. Crowds jostle for handouts at food banks. Some children are reduced to scavenging through rubbish bins for scraps. Hospitals run short of medicines. Malaria has even made a return,” writes the definitively anti-leftist Legrain.

And all this to make sure that Deutsche Bank, and other deserving creditors, receive their interest payments.

But Greek austerity is clearly not the first manifestation of the centre’s extremism. The Iraq War of 2003, prosecuted in part by that denizen of the centre-ground, Tony Blair, resulted in between 185,000 and 700,000 deaths. Through deregulation and liberalisation the mainstream was midwife to the huge economic crisis of 2008, and in response, has inflicted the costs of paying for it on those least responsible, whilst showering corporations with tax cuts, and intervening in the market through Quantitative Easing to ensure share values and wealth of the rich are not depleted. Britain is not Greece but the number of people accessing three days’ worth of emergency provisions through food banks in the UK, has increased nine-fold in a single year and now stands at over 900,000. Internationally, the same political mainstream has aided and abetted off-shoring by corporations at every turn (known euphemistically as globalisation), a process that has sent carbon emissions soaring to their highest ever level, as more and more products are transported across the globe, at precisely the time that emissions must be reduced in order to give civilisation a chance of surviving the next hundred years.

Yet, Syriza is a ‘far left’ party threatening the mainstream with its ‘suicidal’ policies. In an honest world, Angela Merkel’s CDU, David Cameron’s Conservatives and Mariano Rajoy’s People’s Party would be labelled the ‘far centre’. Of course, they won’t; that immediately sounds like a non-sequitur. Which is precisely why the use of words is so jealously guarded. Nobody wants to spout nonsense, do they?

Recognising the common sense behind Syriza’s positions does not mean it will have an easy time in government. Besides sabotage by the troika, Syriza will find that saving capitalism from itself will not be an easy task in this financialised era, a far cry from the golden years of capitalism, when economic growth seemed impossible to stop. The same dilemmas will face Spain’s Podemos, newly leading the polls in that country, which likens its policies to mainstream Social Democracy or even Christian Democracy in the post-Second World War era.

But if a person is asphyxiating under a concrete slab, the first priority is to lift up  the slab and let them breathe. That is what Syriza can do.

Addendum:  

If you want an example of the 'far centre' in all its bizarre glory look no further than IMF chief Christine Lagarde's tribute to King Abudullah of Saudi Arabia

He did a lot for women 'discreetly'. He had this unfortunate habit of beheading people, but, hey, nobody's perfect!

Tottering on the edge but never permitted to fall into the abyss

It has become fashionable again to speak of the contradictions of capitalism. Radical geographer David Harvey is writing a book about the 17 Contradictions of Capitalism (don’t ask why but critical economic thinkers like Harvey and Ha-Joon Chang with his 23 Things They don’t tell you about Capitalism seem to have this fascination with random numbers). For example, one of Harvey’s contradictions concerns market demand. One way to ensure demand is healthy in an economy is through high wages but if they rise too much they eat into profit. So, since the 1970s economies have definitively swung the other way, suppressing labour and trade unions and trying to restore profit. But that just creates the opposite problem, with employees whose wages are being squeezed unable to afford the products produced by firms and turning to borrowing as a consequence - creating the economic problems we are painfully aware of. That’s a contradiction – whichever way you turn under capitalism (a system in which employees and employers have conflicting interests), insoluble problems rear up.

But I want to talk about another contradiction of contemporary capitalism, albeit one which has attracted less attention, but is still a contradiction in the sense of attributes being in conflict with one another. That is modern-day capitalism’s instability, indeed worsening instability, countered by the determination of business representatives, politicians and the state to always stop it from collapsing completely. That is why, I would suggest, we inhabit this strange and conservative world.

Bubble Trouble

Capitalist instability is attributed by Keynesian and Marxian economists to the business cycle: competing firms produce more and more goods which eventually outgrow the ability of workers to consume them, glutting the market and causing bankruptcies and recession. Once this process of destruction has been played out, the process can start all over again. It is one of the features of the last thirty years that this instability has become chronic. Britain, for example, has suffered three major recessions and spikes in unemployment since 1980, in contrast to none between the end of World War Two and the mid-1970s.What has happened is that the instability of the business cycle has been supplemented by the greater volatility of a financialised economy. According to the Cambridge University economist Ha-Joon Chang, virtually no country in the world had a banking crisis between the end of the Second World War and the mid-70s. Between the mid-70s and late ‘80s, 5-10% of countries did. This grew to 20% in the 1990s and then to 35% with the onset of the 2008 global financial crisis.

Another way to look at this process is as a series of financial bubbles which went the way of all bubbles. “The thing you need to realize,” wrote Paul Krugman in August, “is that the whole era since 1985 has been one of successive bubbles. There was a huge commercial real estate bubble in the 80s, closely tied up with the S&L crisis; a bubble in capital flows to Asia in the mid 90s; the dotcom bubble; the housing bubble; and now, it seems, the BRIC bubble. There was nothing comparable in the 50s and 60s.”

The bursting of these bubbles caused major real world effects. The East Asian crisis of the 1990s, referred to by Krugman, precipitated mass unemployment in the region and more foreign ownership of companies in countries like South Korea. What he modestly calls the “housing bubble” became the 2007-8 global financial crisis whose effects are still being intensely felt now. But the point to keep in mind is that action by governments prevented these crises from following their natural free market course and becoming far more destructive than they actually were.

Don’t purge the rottenness out of the system

Marxian economist Andrew Kliman has pointed out that the 1930s Great Depression was the last time there was a genuinely free market response to one of capitalism’s periodic busts. Then US Treasury Secretary Andrew Mellon wanted to “purge the rottenness out of the system” by liquidating stocks, labour, real estate and farmers. “The amount of capital value that was destroyed during the Depression was far greater than advocates of laissez-faire policies had expected,” writes Kliman in The Failure of Capitalist Production: Underlying Causes of the Great Recession, “and the persistence of severely depressed conditions led to a significant radicalization of working people. Policymakers have not wanted this to happen again, so now they intervene with monetary and fiscal policies in order to prevent the full-scale destruction of capital value. This explains why subsequent downturns have not been nearly as severe as the Depression.”

If you want to see an example of “significant radicalization” that policy-makers are so desperate to avoid, look to Greece now, where both the socialist Syriza and Fascist Golden Dawn are on the rise, and in danger of eclipsing the conventional, capitalist parties. The suffering in Greece is politically created, as opposed to just being an outcome of economic slump, but it shows what the “full-scale destruction of capital value” could look like and bring in its train and why policy-makers are so terrified of universalising it.

The economist, Harry Shutt, has said the period since the 1970s has been characterised by a “progressive postponing of the evil day” on the part of ruling elites. The 1987 stock market crash was nipped in the bud by pumping money into the banks, the Latin American debt crisis resulted in public bail-outs, the response to Russian hedge fund crisis of the late ‘90s was a recapitalisation of financial institutions by the US government to the tune of $3.6 billion and when the dot.com share bubble burst in 2000, interest rates in the US were held below the rate of inflation for three years in order to encourage borrowing and avert a recession.

All these government interventions to stop capitalist busts following their natural course are dwarfed by what happened in 2007/8. A conservative estimate puts the cost to the public at arresting the crash at $7.7 trillion in the US and £1.5 trillion in Britain. There is a consensus that this intervention had to happen, governments had to stop this “sucker going down”, in the poetic words of George W Bush. Without action, companies would have been unable to pay their staff, ATMs would have not dispensed cash, trains and buses would not have run. The system would have collapsed, with untold and unpredictable human consequences and suffering.

There was political unanimity about the necessity of government intervention. For the Right and Centre and faux-Left, intervention meant “capital value” was saved. For the Left, intervention meant that the structures on which ordinary people depend for the livelihoods were stopped from going under. Allowing everything to be liquidated, as Andrew Mellon recommended in 1929, was not regarded as an option. Referring to Mellon, the famous left-wing economist, John Kenneth Galbraith wrote in 1954: “a developing depression would not now be met with a fixed determination to make it worse”. The contemporary mainstream Left, Right and Centre would all concur.

Groundhog Day

But, as a result of this consensus, little attention is paid to the consequences of the fact that complete collapse was not allowed to happen, that “full-scale destruction of capital value” was prevented: the huge insolvent institutions bailed out (which, if the market had had its way, would now be in the dustbin of history), simply said ‘thanks very much’ and went on acting in precisely the same way as they did prior to the crash occurring. That is why there is a Groundhog Day quality to the UK economic ‘recovery’ based, as it is, on rising house prices and household debt; factors which caused the crash in the first place. The only purging allowed is inflicted on those at the bottom of society – the unemployed, benefit claimants, the disabled. Those at the summit are the recipients of government intervention, not laissez-faire. Nothing was solved and nothing has changed, not least declining real wages which necessitate greater household debt for consumption to go on happening.

The processes that aim to re-balance the economy, which almost all politicians say they want, cannot happen because the dominant financial institutions, which in the years leading up to the crash made the economy so unbalanced, are still dominant - because they were artificially stopped from going bust. Instead of innovation and organic growth, you get stagnation, monopoly and the unalterered ascendancy of finance. Contemporary politics is characterised by a fervent desire for the benefits of capitalism, but an equally strong aversion to experiencing its negatives.

Looked at another way, it is possible to have the advantages of capitalism - healthy economic growth, innovation, new firms replacing old - but only if you accept periodic destructiveness and all that that entails. But, of course, the last time this destructiveness was allowed unbridled reign, in the Great Depression of the 1930s, the results were not only the immediate ones of mass unemployment, hunger and destitution but the later, though no less attributable ones, of Nazism, Stalinism and the physical annihilation of World War Two. Only after this orgy of destruction had played itself out could the so-called “Golden Age” of capitalism begin.

Thus there is a determination on the part of ruling elites to perpetually put a lid on the instability of capitalism for fear of what will ensue if they don't. But this inherent instability keeps bubbling up nonetheless. The question now is: are ruling elites merely (quite literally) buying time, in a futile attempt to avert a systemic meltdown that will inevitably happen eventually? Will the next one blow the lid off?

Note: I’m indebted to this article, Forever blowing bubbles, on the UK Independent Working Class Association site, which sparked the idea for this post.

The second time as tragedy as well. Is history repeating itself in Greece?

The great events of world history occur twice, said Hegel. “He forgot to add,” corrected Karl Marx, “the first time as tragedy, the second time as farce.”

But perhaps Hegel was right. The Greek trauma shows history repeating itself, but as Dudley Moore once put it, “I can’t see the bloody joke.”

In the 1930s, as the Great Depression spread, the liberal market civilisation that had reigned for a century, swiftly broke down. Into the vacuum came two forces. One was a civilised response to suffering, the conscious subordination of the capitalist economy to the needs of democratic society, exemplified by the American New Deal. The other was Fascism, which caused, in the words of the contemporary historian Karl Polanyi, “sickness unto death”.

In Greece now you have a left-wing grouping, Syriza, falsely labelled “far left”, expressing mass opposition to the austerity of the March Eurozone bailout, that is systematically dismantling the features that made society liveable. 

As they rise, so too do the Neo-Nazi Golden Dawn, a very different response to the same breakdown. Syriza offers the hope, writes one Greek economist, of avoiding “a disaster than might truly lead to the rise of fascism.” 

In the 1930s the upholders of the old order – the economic liberals, the free-marketeers of their day, believed everything would be fine in the end provided people just grinned and beared it. Wages had to be cut, social services slashed and jobs destroyed but if the pain was stoically endured, the economy would eventually return to health.

But this belief in super-human stoicism was always a fantasy. “To expect,” wrote Karl Polanyi, “that a community would remain indifferent to the scourge of unemployment, the shifting of industries and occupations and to the moral and psychological torture accompanying them, merely because economic effects, in the long run, might be negligible, was to assume an absurdity.”

Now we are asked to believe in the same absurdity. The intransigent role of the ‘30s economic liberals is now played by the German government. “The Greek nation knows what it has to do,” said the German finance minister Wolfgang Schaüble last week. “Most Greeks want to stay in the euro. We need to make it clear to them that the terms for that are the fulfillment of the reform requirements of the aid programme.”

What the “reform requirements” mean for ordinary people was brought home by a Greek film-maker, Constantine Giannaris in The Guardian newspaper on Saturday.

“The scenes here at the moment are horrifying, the kind of scenes unthinkable in London or Berlin,” he wrote. “Not third world, but fourth world. Many immigrants and asylum seekers here are looking through rubbish cans [for food], and now impoverished workers, hundreds of them, are having to sift through recycling, taking the scraps of metal and paper to sell in order to make ends meet. We have junkies with no methadone or needle programmes, and prostitution is rife.”

Everything will be alright in the long-run says the German government, echoing ‘30s economic liberals. But in the long-run, as John Maynard Keynes observed, we’re all dead.

Syriza’s “far left” programme, its response to this unnecessary suffering, isn’t radically left-wing. The programme’s features – a moratorium on debt repayments, a debt audit, redistribution of income, bank nationalisation (perish the thought!) and an industrial policy to rejuvenate manufacturing – would have been considered fairly centrist after the Second World War. It’s less radical, in some respects, than the American New Deal.

In Greece now, the orthodoxy has been scorned by most people for the callousness it entails. The centre has been exposed as extreme and unyielding. Into the void comes both a new form of the extreme Right and the radical Left. They are both a rebellion, as Polanyi understood, against the same determinism. But they are completely different.

One side wants a humanitarian response to suffering. The other just wants to take it out on other people, often immigrants. According to the Golden Dawn leader, “The new Golden Dawn of Hellenism is rising. For those who betrayed their homeland, the time has come to fear. We are coming.”

What is happening in Greece may be an extreme example, a 21^st century repetition of the political dilemmas of the 1930s. Or it may be a foretaste of things to come. The awaiting fate of Spain, Portugal and Italy, for example, which all have their own histories of fascism.

But if history is repeating itself, we have the freedom to learn from last time. If they win the next Greek election Syriza will, to be honest, play a role of saving capitalism from itself, as the New Deal did in the thirties. The rationale will be to alleviate colossal suffering and, because the alternative to doing nothing, fascism, would be far worse than neoliberal capitalism.

But after you have preserved civilization, you have to question the logic of reforming and making human an economic system that periodically plunges humanity into unnecessary suffering. The real tragedy would be to humbly wait for the next plunge.