IMF Exposes Dogmatic Marxism - Part 2 of 2

A couple of weeks ago, Eddie ford wrote an article, in the Weekly Worker, about the situation in Greece, in which he argued that there was no possibility that the EU leaders, ECB and IMF would agree to writing down Greece's debt. Once more the notion of an overriding capital-logic lies behind this claim. They would not agree, Eddie claimed, because if they cancelled Greece's debt, then Spain, Portugal, and Italy would want similar treatment and, “there is no way, either politically or economically, that Germany could afford to foot the bill.”

But, as I pointed out in a letter in response this is a rather strange argument. For one thing, Germany, along with other creditors, including the IMF, had already written off large amounts of Greek debt, without any of the problems claimed. Although large amounts of Greek debt held by private individuals and institutions had been bought by states across Europe, private bondholders had still already agreed a “voluntary” 30% haircut on those bonds.

Secondly, everyone knows that Greece will never repay the €360 billion of sovereign debt – and if that goes in a forced default, the €360 billion of private Greek debt, will quickly follow it, posing a much greater problem for European bondholders, particularly already insolvent European banks. In that case, why make an issue over writing off a debt that will never be repaid?

Thirdly, it makes no sense to say that Germany could not afford it. The debt represents not real capital, but only fictitious capital. It would only make sense if Germany were itself to compensate the owners of all of this fictitious capital. But, there is no reason why they or anyone else should! If you lend money-capital to a company, by buying a share or bond, issued by that company, you take the risk that you might not get repaid, or that you might get back less than you lent. The same is true if you lend to a country. The extent of that, and the proportions can be understood, when the €750 billion (sovereign and private debt), of Greece, to be written off, is compared with the approximately $8 trillion wiped of Chinese shares since 12th June, $2 trillion of that wiped off just on Friday!

In fact, the main reason we have austerity being imposed in the UK, Ireland, Spain, Portugal and Greece is precisely because the banks in those countries went bust, but instead of making the share and bondholders in those banks and other companies lose their fictitious wealth, the state in each of these countries bailed them out, and is now forcing taxpayers and citizens in general to replenish the state's coffers.

Fourthly, such a policy cannot be said to be even in the interests of capital. It is certainly in the interests of those individuals who own large quantities of fictitious wealth – in the short term, because the inflated prices of their shares, bonds and property are maintained – but, in no sense, is it in the interests of productive-capital, which sees resources drained away from it, for speculation, as well as seeing surplus value drained in interest payments.

In his reply to my letter, Eddie has put forward an even stranger argument. His main argument, that the debt could not be cancelled, because Germany could not afford it, has been dropped like a hot potato. Instead, having let go that argument, Eddie seems to have quickly cast around, and picked up another that was lying around, to replace it.

Eddie now wants to claim that well yes, not only could Germany afford to pay, after all, and yes it would actually be beneficial for capital to write off the debt, so that there could be capital accumulation, and restructuring. You might think that after such a reversal of opinion then that Eddie would draw different conclusions, but no, in order for the conclusion to remain the same, the argument itself has to change. So, now Eddie writes,

“If you wanted to begin a new round of capital accumulation, that is exactly what you would do. But who the hell is going to actually do it? Germany will not, nor will the United States. There is no hegemon capable of imposing such a plan or refashion the world in that way.” 

So, now we have gone from an argument whereby a debt that everyone knows will never be repaid cannot be formally cancelled, because it is not economically in the interests of capital, particularly German capital, which “could (not) afford to foot the bill.” to an argument whereby Germany COULD afford it after all, it would be beneficial for capital, and exactly what capital would do, rationally, the only problem being that capital cannot find anyone to pull the trigger, and act in its interests. Unbelievable.  Its worth remembering that there was also no hegemon that organised the $8 trillion dollars that were wiped off Chinese shares, and so disappeared into thin air, the fictitious wealth of those shareholders!

It was, perhaps, unfortunate for Eddie that, on the very day that he was telling us there was no possibility of Greece's debt being written down – which should be further written down – because there is no global hegemon who could do it, on behalf of capital, the IMF came out with a clearly and strongly worded statement, obviously backed by Washington, which has been vocally critical of the stance taken by conservative politicians in the EU, and in the ECB, which argued for precisely that!!!

The IMF is one of those global social-democratic bodies established after WWII, that reflected the fact that an increasingly global capital really needed a global state to act as its Executive Committee, but in the absence of which, it would instead have to settle for a series of quasi-state global bodies. The IMF has come out, contrary to Eddie's assertion of what is possible, to say that not only does Greece need an additional loan of $50 billion, but its debts need to be written down, and effectively written off for the next 40 years.

Eddie's argument flows from a further logic presented by the comrades of the WW that Syriza should not have taken office, because it could not legislate socialism in Greece, and it is only socialism that could have provided a solution to the problems in Greece. But, as I have written in response, in their paper previously, this position confuses a number of important points.

They base their argument on a number of concepts. Firstly, on the basis of Engels' argument in The Peasant War in Germany, about a revolutionary party not taking power in conditions where the material conditions are not ripe for socialism. They argue that socialism, in Greece, is not possible in isolation, and so socialists should not take power until the possibility of socialism across Europe exists.

The problem here is that Engels was talking about a revolutionary party taking state power. In fact, the reason why Marxists opposed the slogan “Labour Take the Power”, put forward by left reformists in the past, is precisely that it confuses the taking of governmental office with the taking of state power.

There has never been any chance of a Labour government in Britain, including in 1945, being anything other than the temporary custodian of governmental office, whilst the state power itself resided firmly in the hands of the Dictatorship of the Bourgeoisie. For Labour to “Take The Power” would have required that such a government begin to smash that state apparatus and transfer state power into the hands of workers, organised into Workers Councils and backed by a Workers' Militia. But, unless workers already were organised into such bodies, and with the necessary transformation of the consciousness of the active majority of the working-class, any such demand would be adventurist in the extreme.

In other words, a demand such as “Labour Take The Power”, only has any meaning in a condition of dual power, where it is tantamount to the demand for a Workers Government. The AWL's repeated demand for a Workers' Government, over recent years, is a similarly meaningless demand, which previously they would have ridiculed, because, under current conditions, it can only be interpreted as a demand for a right-wing, reformist Labour Government!

To raise the demand “Labour Take The Power” outside those conditions, can only be interpreted either as a dangerous piece of adventurism, which invites a reactionary response, from the state, or fascist forces, or else it is a purely reformist demand for a Labour government, which sows confusion about the nature of the state, and sows illusions about what such a government might or could achieve.

But, Syriza is not a revolutionary party, any more than the Labour Party is a revolutionary party. Not even the conservative bourgeoisie have attempted to describe it as such. Some British Tory MP's, including former Chancellors, have said they have met Varoufakis and others and found them to be very clever people, and so on. Syriza is a social-democratic party in the mould of past Labour governments, or the German SPD. There is nothing in its economic programme that is significantly different than Obama has been pursuing in the US. At no time have they suggested that their aim is a socialist reconstruction of Greek society, or anything beyond modernising its economy firmly within the bounds of capitalism, and a capitalist EU.

So, the issue of “Syriza Take The Power” no more arises than at every election time socialists argue for a vote for Labour. In fact, the WW's position of asking workers to vote for Syriza, but then demanding that Syriza refuses to take office is daft. If in 1945, Attlee had been told by Marxists that he should not take office because the conditions were not ripe for Socialism in Britain, I can only imagine what my dad, and thousands of others returning from the war would have been - “we've seen leadership like that from tossers in the army brass.”

Just because you can't win the war, immediately, doesn't mean you can't win the odd skirmish, or battle, here and there, in order to advance your positions, and to the extent that social democrats wage such struggles, Marxists should give them critical support, not stand like sectarians carping from the sidelines of history.

In fact, just as the experience of repeated Labour governments provides the basis for Marxists to have been going through that experience with workers inside the party, so as to illustrate the limitations of its programme, so Syriza's experience in the last five months has thrown a spotlight on the nature of the conservative politicians running Europe and the ECB; it has opened up divisions between the French and German governments, as well as between the US and Europe; and it has illustrated the limitations for any state in Europe, in dealing with the issues of debt and growth within the present structural limitations of the EU, and the continued influence of national and conservative forces. 

The other backdrop to the WW's position is the experience of Chile. But, again, its necessary to understand the clear difference between Chile, in the 1970's, and Greece today. Back in the 1970's, the USSR still existed; there was a Cold War, in which the US was determined to cede no quarter to its opponent, even in terms of a potential or tacit support from countries that may be of strategic importance, still less those in its own backyard.

The US was infused with anti-communist paranoia, and a belief in the domino theory, whether in South-East Asia or Latin America. What is more, although Popular Unity was itself a Stalinist, reformist party, unlike Syriza, it was actively seeking to make significant changes within society. More than 40 years on, the USSR has gone, and capitalists have plenty of experience of dealing with reformist parties like Syriza, as well as with Stalinists, without fretting that they may pose an existential threat to the interests of capital. In fact, during that time, it has been imperialism itself, in a range of the more advanced of these developing economies, that has acted as a facilitator of a change of political regime, from Bonapartism of some form, towards social democracy.

The attitude of the US towards Syriza is in marked contrast to the attitude towards a range even of purely radical nationalist regimes, such as the Sandinistas and so on, in the 1970's and 80's.

Moreover, in Greece itself, there has been absolutely no sign of the kind of mobilisation of the state or fascist forces against Syriza, after it came to power, that was seen against Popular Unity. Quite the contrary. As Paul Mason has reported, there is a marked difference between the rather peaceful nature of protests taking place today, with a lack of the kind of heavy handed policing and tear gas that was typical prior to Syriza's victory in January. Not only, has the victory in the referendum, by such a large majority, sent the conservative parties into confusion and dissipation, but Golden Dawn seems to have been increasingly marginalised over recent months.

In fact, it is not the potential for the success of Syriza's programme that is likely to lead to a strengthening of, or a resort to such forces, but the opposite. If Syriza is able to win a cancellation of debt, and even a lessening of austerity, so that the economy can begin to grow, the fascists will be made irrelevant, because that will go a long way to resolving the immediate economic crisis facing productive and merchant capital in Greece that is being caused by that austerity, and the constriction of the economy by the debt stranglehold.

But, if Syriza is unable to push forward with such a solution, if it then either resigns, splits, or is forced from office, what then? The people have lost all faith in PASOK and New Democracy, whose corrupt politicians created the crisis in the first place. To Potami and other centre right parties have no great support, and are as tainted with the failures of the past, as PASOK and New Democracy, from which they have come. In fact, the 61-39 result understates that, because many of those who voted Yes, have openly stated that they did so with a heavy heart, feeling that they had no alternative.

So, even had there been a Yes vote on Sunday, or even if the Troika continues to play hard ball, so that Syriza calls new elections, or stands down, or even if it were to split, with a section of Syriza forming a national government, so as to implement any of the austerity measures that have been so resoundingly rejected, the Greek workers and peasants themselves would resist them, as they have until now. The difference being that the forces of social-democracy having been so weakened, as the force of argument turned to an argument of force, resolved in the street, the focus would turn once again to the blame being placed upon foreigners, in Germany and northern Europe, imposing austerity on the country, on other foreigners, immigrants flooding into the country from across the Mediterranean, again caused by the actions of those northern Europeans, and the support for the fascists would soar. 

With part of the blame for that also being placed upon the rise of Neo-Ottomanism, in Greece's historic enemy Turkey, as it supports the forces of clerical-fascism across the region, and with a sharp rise in support for those same clerical-fascists in Bosnia, the conditions would be set for a new Balkan conflagration, similar to that of the start of the 20th century, with Greece looking once more to its historic ally, Russia, for support under such conditions. See: Lessons Of The Balkans.

The argument against taking office could be made that, because reformist governments are forced to oversee attacks on the workers they thereby become discredited. But, Syriza has not increased the attacks on workers. Instead some public sector workers have been taken back on, privatisations stopped, some pensions restored and so on. As Paul Mason has reported, Syriza has also carried out other social measures that strengthen the position of workers, as well as carrying out reforms against the most hated sections of the police.

Rather than Syriza being blamed for the current situation, even amongst many of those who voted Yes, it is the institutions who are being blamed for blackmailing the country, and bullying it into submission. If an election were held tomorrow, its almost certain that Syriza would obtain an outright majority.

None of that means that Syriza will obtain the backing from the European working-class required to face down the conservative politicians that rule Europe in the interests of the money lenders. Nothing in life is certain. But, if you do not fight, its certain you will not win.