Is Greece Heading Towards Fascism?

Some months ago, before the Greek election, I argued that a Syriza Government could not buckle. The assumption of bourgeois politicians, and governments, across Europe, if not the globe, was that it would have to do so. Bourgeois politicians and governments work on the assumption that life more or less always goes on in the old way, until it doesn't. That is why they are always surprised by revolutions. They assume that everyone is like them, and that the way things are is the way they have always been, and always will be.

Ahead of the Russian Revolution, rich Americans financed a range of Russian groups, including the Bolsheviks. They saw the Tsar as an impediment to the further development of capitalism in Russia, and its opening up to trade, and investment opportunities. By financing all these different groups, they thought they were just greasing the palms of whoever the next government was going to be. It never occurred to them that the Bolsheviks might be a government unlike all the others they had previously dealt with. Then when they realised that they were, they reacted in a diametrically opposite manner.

First they tried to revert to the situation ex ante, by supporting the tsarist forces, and by directly intervening militarily themselves. Then, when that hope was lost, and when Lenin and the Bolsheviks actually did try to get them to invest in Russia, through joint ventures and so on, only a very few like Armand Hammer took them up on the offer.

Bourgeois politicians across Europe, have assumed that, in the end, Syriza would have to bend, and act like every other social democratic party – which is what Syriza is, just a more radical, left social-democratic party – and negotiate at the expense of the working-class. That is not helped by the fact that many of those bourgeois politicians are themselves conservatives, who over the last thirty years have soaked up, and spewed out the mantra that only monetary policy can be allowed as a means of state intervention, and that co-ordinated fiscal intervention, to stimulate investment and growth, must be avoided. Nor is it helped by the fact that, over that period, social-democratic politicians have themselves been cowed, and led to accept that mantra in large part.

Social-democratic governments in the UK, Spain, Portugal and elsewhere, allowed themselves to be pushed into dropping the fiscal intervention that all governments adopted, in the aftermath of the 2008 financial crisis, and committing themselves to austerity – usually resulting in those governments losing the subsequent elections anyway! Had social-democracy been stronger, over the last period, Greece would have been in a better position, because it would have been possible to oppose the conservative proposals for austerity, with the alternative of a co-ordinated programme of fiscal intervention, and planned investment across Europe, similar to the Marshall Plan, adopted after WWII. It would have meant that the real problem facing Greece, and other peripheral economies – which is not the facile idea that it is a shortage of money, but is in fact a shortage of capital – could be addressed.

Those conservative bourgeois politicians, like Margaret Thatcher, in the completely different conditions of the 1980's, believe that There Is No Alternative (TINA) to austerity, in other words, screwing the Greek workers even further. The same thing was seen after WWI, when bourgeois politicians in the UK and France, imposed the onerous conditions of the Treaty of Versailles on Germany. They were told at the time, by Keynes in the UK, and by Woodrow Wilson in the US, that it was a mistake, but they ploughed ahead anyway, believing that the way things were is the way things always had been, and always would be, and the plebs would just know their place, and continue to suck it up.

Instead, as Trotsky pointed out, they acted as the greatest recruiting sergeants for Hitler and the Nazis there could be. Germany, like Greece went through the motions of electing governments of various stripes that each inflicted the austerity upon them, whilst claiming to be minimising its effects, and acting as fairly as possible, but the austerity still dragged on, with no prospect of the promised jam tomorrow. Eventually, all of the promises of the politicians begin to ring hollow, and the people look for someone with a different tune to play, and with apparently easy solutions to their problems.

Greece is at that stage now. The old bourgeois centre has already collapsed. New Democracy and PASOK effectively got blown apart with forces moving to the right and left. Initially, the beneficiary of that has been Syriza, but it can only continue to fulfil that role, if it delivers the goods. But, largely the ability to deliver the goods is not in its hands. Syriza's leaders have been right to argue that a solution does not lie in simply providing more loans, or an extension of existing loans to the country, in return for which, the government would have to continue to impose austerity on the people. That is because, the real problem for the economy, as stated above is not a shortage of money, but of capital.

A shortage of money can always easily be dealt with, in an economy with a fiat currency – just print more of it. But, as Marx demonstrated, economic crises – as opposed to actual financial crises – always appear as though the problem is a shortage of money, when in fact the real problem is an inability to reproduce capital.

For example, you could print a load of money, and give it to an entrepreneur and say, here take this money, start a business, employ some people, buy some machines and materials, produce something and sell it. That is effectively what the monetarist solution to the crisis, via QE amounts to. But, unless what that entrepreneur then produces can be sold, at a price that is sufficient to enable the workers to be paid once more, for the materials consumed in the production to be bought once more, and hopefully to leave an additional amount for profit over and above those costs, the exercise will have been in vain. No real additional wealth will have been created, and indeed the resources in materials and labour will have been wasted, because they could have been employed in some other venture.

The determining factors of whether this is possible is quite simple. Firstly, there must be a demand for what is produced. Nobody really wanted to buy Sinclair C-5's, for example. The prime requirement for any commodity is that it is a use value, it is wanted by someone. But, secondly the next requirement is that it is demanded in sufficient quantity at the price of production. If Sinclair C-5's could have been produced cheap enough, they may have been profitable, as people bought them as toys for their kids. The determining factor here then is how cheap can the materials used in its production be bought, which comes down to a question of productivity, and how productive is the labour that produces the C-5's themselves.

This is the problem that faces Greece and other peripheral economies. It is not a shortage of money, but of capital. It needs more productive capacity of a kind that is globally competitive, i.e. that can produce a range of commodities that can be sold in the global economy at prices that are both no more than other producers, and also, which more than replace the capital consumed in their production. That requires large scale investment in a range of industries, to provide the latest technology and so on, as well as investment in economic infrastructure so that social productivity and profitability is raised too. That requires a coordinated programme across Europe of fiscal stimulus and investment. It is the exact opposite of austerity.

The solution for Greece, therefore, is not directly in Syriza's hands. It lies in a rejection of the policy of austerity across Europe. Greece could not provide that solution itself, because the solution requires capital, which is what Greece does not have. Even if Greek businesses were extremely profitable this would not solve the problem. Those profits themselves need to be converted into capital. In other words, it is not a matter of having a load of money, whether it comes from being borrowed, or comes from the profits of domestic businesses, it must be possible to put that money to work, as capital, to be able to create new businesses, to expand existing businesses, to employ more people, and as a result of this activity, be able to produce even more profits. Greece could have a huge pool of cash, but it would not solve the problem unless it could use that cash to create such businesses that would be able to operate profitably.

The solution for Greece, and for Syriza, therefore, necessarily lies outside Greece's borders. The hopes of the nationalists inside Syriza and elsewhere, to produce some solution inside Greece are forlorn, and will only lead to reactionary results, however, well-meaning, or even revolutionary the intentions of those that propose them.

It is, in fact, a pity that Syriza has spent so much of its time in recent weeks hobnobbing with these various bourgeois politicians across Europe, when its time would have been better spent vocally and actively working with Podemos and other social-democrats across the continent to oppose austerity, and to present a more coherent, and coordinated strategy, for social-democrats and socialists to pursue as an alternative. The solution for Greece does not reside in the Chancelleries of Europe, but on the streets of its cities, in its workplaces, and workers communities, in its trades unions, co-operatives, workers parties and community organisations. It is from there that the movement for change must be built, and Syriza should be using its leverage from government to that effect, so too if they were honest about their left, social democratic rhetoric should the SNP and others.

Without such a movement, or some unexpected change of heart of Europe's conservative, bourgeois politicians, Syriza is lost. If it fails to buckle, then the Greek economy is sunk. There are things it could do, in the meantime, as suggested in previous posts. They could default on their debt repayments, and dare their creditors to declare a credit event that could be the spark to a global financial crisis greater than that of 2008. They could wait for the ECB to cut its links with them, and then begin to issue, through the Greek Central Bank, their own Euros, by the creation of electronic deposits. They could, even use this as a means of ending austerity in Greece, and stimulating the economy, but that would only be a temporary measure, useful for buying time, whilst a wider European movement was built.

If Syriza fails to buckle on austerity, but pulls out of the Euro voluntarily, returning to the Drachma, that would be disastrous, reactionary, and would amount to merely buckling and imposing austerity by other means. A new Drachma would collapse in value on issue. It would amount to resolving the situation by the same kind of economic theory as the Mercantilists proposed prior to even the Physiocrats and Adam Smith.

The Mercantilists were also entranced by the idea of money as wealth. They thought that only that labour which was engaged in the production of goods for export was productive. It was this labour, which brought in the gold and silver in payment over and above the value of goods that had been imported. They saw this gold and silver as the real nature of the wealth of nations, because with it a nation could then employ people in other activities. Hence they sought to diminish all employment in those industries that were not geared to export, and to restrict consumption as much as possible, so as to divert as much production as possible for export, and to limit imports for consumption.

The policy of resolving a crisis by devaluing the currency amounts to pretty much a return to this Mercantilist theory. A more or less worthless Drachma would make Greek commodities cheap in foreign markets, and thereby encourage exports, and by the same token it would make imports of foreign goods into Greece horrifically expensive. It would then devastate Greek living standards, as they would find themselves paying extortionate prices for the commodities they required. Workers would be forced to take massive real wage cuts, and/or would have to work extremely long hours, just to earn enough to live.

At the same time, it would do nothing to remedy the real problem of lack of competitiveness due to low productivity, due to lack of investment. In fact, it could make that situation worse.

But, if Syriza does buckle, it also spells doom. Syriza is already breaking in two, under the pressure, as its more right-wing, social democratic faction, that came across from PASOK, is being pulled to the right, whilst its more left-wing faction is pulling in the opposite direction, towards no compromises, with the Stalinists and a section of the pseudo-Trotskyist wing pulling increasingly towards the nationalist, autarchical solutions that will lead to disaster.

As I pointed out back in January, the consequence of that will be not just that Syriza will collapse or be blown apart into these divisions, but the support it currently has, amongst a large part of the population, will quickly evaporate too. They voted for Syriza on the basis that it was different to the old parties, not because they had some developed revolutionary socialist consciousness. If Syriza then acts just like the old parties, they will be destroyed even more quickly than happened to PASOK, and the Greek people have nowhere else to turn but to the fascists of Golden Dawn.

Its very unlikely, the bourgeois politicians of Europe want that given the history of the region, and the increasing fraying already of Europe's boundaries, as the clerical-fascists of ISIS begin to gnaw away like rats at its edges, chaos spreads across the Middle East and North Africa, following the disastrous interventions in Iraq, Syria and Libya, and a resurgent Turkey, rebuffed by the EU from membership, joins with other Sunni regimes, in the Gulf, to support Islamic terror, and assert their own interests within the region, destabilising not just Europe's southern border, but also its eastern borders too.

For those reasons, the bourgeois politicians in Europe have need to reach a compromise with Syriza and soon, but history is replete with examples of how such bourgeois politicians stumble into crises. The current UK EU referendum is one example, the Falklands War another. No one can count on them not making a mess of it again.