Who Are the Labour Ideologues Now?

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Whatever the outcome of the Labour Party leadership contest, it is clear that there is a huge gulf between the grassroots and a majority of the Parliamentary Labour Party.  Many MPs are left looking shaken and bewildered by the groundswell of support for Jeremy Corbyn.  However, they shouldn’t be so shocked.  As far back as 2007, Jon Cruddas topped the first round of voting for the deputy leader.

‘There’s much more life in the party than I thought,’ says Cruddas. ‘When I started I thought the party had been hollowed out. But the result shows that the ‘virtual’ politics practised at the centre, the politics of positioning and messaging, was out of touch with the party.’

 

The history of the Labour Party and of the UK would have been very different if Bryan Gould had been elected leader instead of John Smith and the transatlanticists like Blair and Brown.  In the re-posted piece that follows, Bryan Gould sums up the consequences of the Labour Party capitulating to the economics of Margaret Thatcher. 

Who Are the Ideologues Now? (UK)

By Bryan Gould – 3 August 2015

It is a truism of today’s political analysis that, over the three or four decades since the so-called “free-market” revolution swept across the western world, the centre of political gravity has moved substantially rightwards.  Most of those of middle age or younger will have grown up, after all, in a world where it has been widely accepted that markets are infallible, that government spending is wasteful and a drag on economic development, that running a country is just like running a business, that we all benefit if the rich get richer, and that private profit justifiably overrides all other considerations.

So insidious and comprehensive has been the advance of this orthodoxy that even those who choose to question or oppose it are hard put to understand how complete has been its victory.  As we see from the current plight of the Labour Party, political leaders who seek to offer alternatives are disarmed and enfeebled, without realising it, by their experience of growing up within its confines.  They are, in any case, urged – on electoral grounds and even by their friends – to accept the new reality; and that reality, of course, keeps on moving inexorably rightwards.

This re-definition of the political landscape has meant that what would once have been regarded as the extreme outer edge of what is politically possible is now the new centre ground.  Any divergence from this central position is, by definition therefore, literally eccentric; and any move away from “free-market” orthodoxy is condemned as either a return to the past or an irrational lurch leftwards.

These definitions of centrality and divergence have the further advantage, for their proponents, of confirming a long-held public perception.  In the days when the political left was prepared to challenge existing power structures, they were undoubtedly helped by their development of an ideology of sorts that allowed them to ground their objections to orthodox policies in some loosely defined analytical framework.  The consequent identification of the left as the doctrinaire element in the political spectrum seems, however, to have inhibited today’s leaders of the left, if the current contest for the Labour Party leadership is any guide, from straying too far from orthodoxy for fear of appearing too ideologically driven.

The right, by contrast, was usually seen as pragmatic and concerned solely with what would work.  Politicians of the right still seek to prolong that advantage by clothing their steady move rightwards in the language of experiment and exploration of what is possible, rather than of ideology.  They have also learned to proceed stealthily, one small step at a time, with the intention of concealing from the public that each new step is in reality a further development of a highly ideological agenda.

That may, however, be about to change.  As the tide of ‘free-market” orthodoxy has reached its high-water mark and appears to be receding (at least in most parts of the western world other than the euro zone), it is more and more likely to leave exposed to public view those new policy initiatives that seem to have little to do with common sense and practicality and to reflect much more clearly what are doctrinaire preoccupations.

Those preoccupations are becoming increasingly apparent.  The priority accorded to the drive for private profit, for example, has led to well-publicised failings in delivering what were once public services, epitomised by the misfortunes of Serco – an international firm operating, among other things, as a private manager of prisons and under pressure for its failures in a range of countries.

Privately owned academy schools, an idea that has now been shown even in Sweden, its country of origin, to produce disastrous results in terms of educational standards, will nevertheless no doubt continue to be supported by enthusiasts on the ground that business people are best placed to decide educational priorities for our children.

And what about the wacky idea, now being contemplated by New Zealand’s right-wing government, of financing the delivery of social services to some of the most vulnerable, including the mentally ill, by selling bonds to private investors who will then look to make a profit from their “investment”?

What links all of these and many other similar ideas is that they have little to do with what will work and best serve the interests of society and its citizens.  They are instead all statements of ideologically driven preference – in each case, a preference for private provision, not because it works better, but because it is a faithful rendition of “free-market” theory.

It seems, in other words, that the usual view of the left as doctrinaire and the right as pragmatic is in course of changing.  It is now the right that espouses the ideological approach and that will go on doing so for as long as it is not held to account and its bluff is not called.  It is the left (when it can make up its mind and, like the lion in the Wizard of Oz, reclaim its courage) that has the opportunity to offer new alternatives to free-market orthodoxy – alternatives that are not the product of doctrine, but that are simply sensible and practical and likely to produce better outcomes.  Isn’t it time that Labour’s leaders caught up with this new reality?

 

Do the Germans Realise the Damage They Have Done to Themselves and Europe?

Do the Germans Realise the Damage They Have Done to Themselves and Europe? Bryan Gould

From Bryan Gould

The Wehrmacht had a crack at it – but that attempt ended in disastrous failure 70 years ago. The long-held dream of German hegemony throughout Europe is, however, back on the agenda and closer than ever to realisation.

The Greek crisis threw up many sub-plots – many of them of great significance of course to the Greeks themselves. But the real story of the Greek crisis is one of much wider import. It has stripped bare to the public gaze just where the pan-European project is really heading.

What we have witnessed over recent months is a painful lesson being handed out to the Greeks – but even more importantly to the rest of Europe. Opinions may differ as to how responsible the Greeks may be for their own plight but what is now clear is that being part of “Europe” does not allow for any back-sliding if events move against you.

So, the Greeks – having already being forced to accept over several years the most destructive of austerity packages – have not only been compelled to accept yet another instalment but have also been stripped of their powers of self-government and of democracy itself.

The bail-out deal forced through the Greek parliament at the behest of European creditors makes absolutely no sense in economic terms. Even the IMF agrees that it makes it impossible for the Greeks to produce the resources needed just to service, let alone repay, their debts; and that is both totally unreasonable and lacking in reason, not only for the Greeks but for the creditors themselves.

But it is the geo-political consequences that are most worthy of note. The Greeks have been treated with scarcely concealed contempt. They have been deliberately and ruthlessly humiliated. The wishes of the Greek people and of their elected government have been over-ridden by external forces who have no concern for their welfare.

The Greeks have suffered this fate, not because they are uniquely culpable, but “pour encourager les autres”. The message has been deliberately designed for the rest of Europe. It is addressed to all those other small and medium-sized members of the euro zone who have suffered under the austerity regime forced upon them. The message is stark – there is no escape.

Any country that might contemplate, as an alternative to euro-austerity, the reclamation of the powers of self-government and monetary sovereignty will be ruthlessly cut adrift. Even the Greeks, benighted as they are, could not brave that fate. The euro-zone is quite evidently a straitjacket, centrally applied and disciplined, whose rules over-ride democracy and the interests of ordinary people.

And who or what, exactly, runs this arrangement from which there is no exit? It is German economic power. The troika of the IMF, the European Central Bank and the European Commission may look comfortingly like a European or even international authority, but the levers of power are actually moved by the German government.

One of the most significant aspects of this unfolding landscape is the extent to which the Franco-German duumvirate, which we used to think actually called the shots, has been left in ruins. The Germans have felt no inhibition or compunction in letting it be seen that it is their view that must prevail. It is a measure of growing German confidence that they could quite publicly reject the preference of their erstwhile partners for a softer approach, and focus instead on giving overt priority to what they see as German interests.

The mailed fist is now clearly visible. Any country in the euro zone that steps out of line will find itself forced back, with its own government and parliament sidelined and left impotent. There can be no debate. There can be no alternative to austerity; neo-classical economic policy and continued stagnation at best is, by decree of the German government, the only option.

The German goal is to establish German hegemony across the whole European economy by ensuring that the policies framed in Berlin are adopted and applied across the continent. They have not found it necessary to fire a shot. But the way forward is not without its risks and casualties.

Any misapprehension about how Germany sees its role in the new Europe has now been dispelled. German ambitions will henceforth be looked at much less tolerantly, and will meet increasingly strong headwinds. Angela Merkel’s confidence that she no longer needs to dissemble about those ambitions will certainly be put to the test.

More importantly, the European ideal has been seriously compromised. A Europe revealed as simply a vehicle for German power is a very different entity from the force for peace and unity which has been sold to us so far.

Europe over many centuries has faced the problem of restraining whichever was the dominant power of the time. They have usually succeeded, one way or another. That is unlikely to change. The Greeks will not be the only ones to pay a price for their bail-out. Europe’s future, too, is now more clouded and uncertain.

Bryan Gould

In Defence of Greece – and Six Myths Busted

The following article was  originally posted prior to the Greek referendum on Sunday. The mainstream media has put the blame on the shoulders of the Greek nation. This article looks closely at the myths which are commonly used as propaganda .

In Defence of Greece – Six Myths Busted

By Joseph Leigh, Lewis Bassett & Michael Walker,

Previously published here

Events in Greece are coming to a head. Over the weekend the leadership of Syriza offered the Greek people a referendum on whether to accept austerity measures – including cuts to pensions and public sector spending, and labour market de-regulation – as the conditions for obtaining funds with which to service its debt repayments. However, by all accounts Greece may be forced to leave the Eurozone before the end of the week. As Syriza has been consistently represented in the mainstream media as an irresponsible and ideologically-driven leftist government, it is important to unpack the seemingly common sense arguments against Syriza.

1. ‘People have to pay their debts. Why shouldn’t Greece?’

When someone lends money to someone else with the intention of making a profit, they take on a risk, as does the person borrowing the money. Because both sides take on a risk with the hope of some future gain, they ought to share responsibility for the outcome. This is why debtor-prisons – common in the 18th and 19th centuries – were abolished: they unfairly punish one party for a scenario created by both lender and borrower. However, neither Europe’s banks which took on risky debts, nor the political institutions which made the policies that encouraged unsound financial practices, are willing to accept any responsibility for the current situation. Vital public services are being destroyed while the Greek economy shrinks because no one apart from Greece is shouldering responsibility for what is a shared failure.

Second, 90% of the bailout money was spent on bailing out the banks, not on Greek spending. The majority of Greece’s national debt (78%) is owed to the ‘Troika’ – the IMF, the EU Commission and the European Central Bank. These institutions lent money to the Pasok government so they could pay back Greek and foreign banks who had recklessly lent money to all European countries before the global financial crisis of 2008-9. When it became obvious that the banks’ predictions about the economic growth of countries like Greece and Ireland were wrong, they immediately demanded their money back. This is what sparked the debt crisis, and led Greece to request bailout loans. The money Greece owes to the Troika was used to bailout bankers who’d got their sums wrong. Only 10% of the loans Greece received from the Troika have reached ordinary Greek people.

Third, if the aim is for Greece to pay back its debts, the Troika’s current policies make no economic sense. If it is to be able to pay back some of its debts Greece’s economy needs to grow, but the consequence of Troika’s policies has been the opposite. As the Syriza government have been arguing: Greece needs to invest to grow its way out of recession, just like Germany did in 1953 after its foreign debts were cancelled and its repayments tied to economic growth.

2. ‘Greece shouldn’t have borrowed to begin with.’

This idea ignores the structural reasons for Greece’s borrowing. All countries borrow money to invest in their economies and compete in the world economy. By 2009 the smaller Eurozone economies – Greece, Portugal, Ireland, Spain – were all burdened with massive debts because their borrowing failed to make them more competitive. As Costas Lapavitsas has shown, the reason for this is simple: the German government froze wages so as to out-compete countries like Greece. Given its superior economic and technological starting point, Germany was always going to win if its wages were low enough. Greece therefore built up a big trade deficit which was proportional to the German trade surplus. So Greek borrowing was actively encouraged by Germany which is now demanding Greece shoulder the blame for what was a failure of the entire Eurozone.

3. ‘Greece should just accept the terms offered.’

The deal offered by the creditors would have condemned to years of austerity a country which, since the first bailout in 2010, has seen years of recession, wages shrink by 25% and unemployment skyrocket. Spending cuts and economic uncertainty have been linked to a spike in suicide rates.

The conditions imposed by the Troika are the same as the Structural Adjustment Programmes (SAPs) which the IMF has been imposing on debt-stricken countries (primarily in the global south) since the 1980s. In Greece, as in those other countries which have accepted IMF loans, the vast majority of the money provided by the IMF will go straight back into the coffers of multinational banks. As per the Greek case, SAPs demand wholesale privatisations, financial and market liberalisation, government austerity, and the destruction of labour rights. These are the exact opposite policies which the Greek population voted for by electing Syriza.

The conditions attached to IMF loans should be an anathema to the left. Yet insiders too, such as Joseph Stiglitz – former Chief Economist at the World Bank – argue the effect of the IMF’s conditional loans has only been to enrich global financial institutions. Even right wing economists who historically approve of the IMF’s behaviour are coming out in opposition of the terms being imposed on Greece by the Troika. This is because whereas the IMF would usually force investors to take a significant debt haircut – i.e. cancel some of the debt owed by the debtor country in return for structural adjustment – the pressure from Eurozone governments and a desire to crush progressive movements in Europe meant Greece was not offered such restructuring.

4. ‘Why can’t they sort it out themselves?’

In a globalised world, economies are interdependent. A trade surplus in an exporting country implies a trade deficit in an importing one, if, as was the case with Greece and the rest of the Eurozone, the exporting countries adopt policies to diminish the economic potential of their rivals. Economic crises therefore require collective solutions rather than the beggar-my-neighbour policies Germany and the Troika are opting for at present.

At the moment the Troika is actively preventing Greece from sorting out its economy by enforcing austerity, which is having a negative effect on growth rates. Because Greece doesn’t have its own central bank it can’t use monetary policy to escape recession, so what the government has been asking for in negotiations with the Troika is debt relief which would allow it to invest in economic growth. But the Eurozone as a whole has rejected these standard Keynesian policies in favour of harsh cuts to investment and public services.

5. ‘Shouldn’t Syriza have tried everything it could to stay in the Eurozone?’

It did. Syriza is widely portrayed by the media as having turned its back on the Eurozone, yet the situation is the exact opposite. At the start of this year Syriza was elected with a mandate both to de-escalate the effects of austerity while remaining within the Euro. Despite some voices inside the party arguing against the so-called ‘good Euro strategy’, Syriza’s leadership have tried relentlessly in negotiations to balance their popular anti-austerity electoral mandate against the will of the creditors.

As recently as Thursday last week it appeared that Syriza’s leadership was willing to accept compromises in the form of further austerity in order to obtain further bailout funds. Negotiations broke down when, late in the day, the final deal offered by the institutions contained neither debt relief nor investment funds, and so if accepted would draw Greece into seemingly endless depression.

6. ‘This doesn’t matter to me.’

Syriza’s negotiations with the Troika have fulfilled a pedagogical role of showing the unwillingness of undemocratic institutions such as the EU and IMF to respect the democratic will of sovereign nation states. Moreover, the unwillingness of the Troika to tie debt repayments to economic growth demonstrates the need to produce political and economic strategies that suggest ways out of the neoliberal economic paradigm.

Greece being allowed to go to the rocks is an outcome that will restrict democratic movements throughout Europe. It will represent the defeat of the first serious democratic challenge to a technocratic neoliberal order in Europe. There is only one party in Greece which will gain from such a scenario: Golden Dawn.

This article first appeared on Novara Wire. 

It is reproduced under Creative Commons Attribution Licence 4

It’s up to Europe’s Leaders now -Bryan Gould

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It’s Up to Europe’s Leaders Now

From Bryan Gould, previously published here: 

Like so many others, I long ago got used to being pilloried as “anti-European” for daring to say that the “Europe” we were urged to sign up to was no such thing, but was a particular arrangement cooked up by the powerful and foisted on the people of that often benighted continent without bothering either to consult them or to take count of their wishes.

As the Greek crisis unfolds, and as it strips bare the pretensions of those powerful forces who talk with less and less conviction of the European ideal and of democratic rights, we can surely no longer be in any doubt. The “Europe” in whose service so much sacrifice is now demanded is a cartel of bankers, financiers and right-wing politicians who have no interest in democracy, or jobs, or the living standards of ordinary people. As the Greek people suffer, and plead “no more”, it is not the travails of the Greeks – or, for that matter, the Spanish, or the Portuguese, or the Italians – that weigh with Europe’s powerful; their sights are fixed on maintaining austerity and discipline, on adhering to ideology and doctrine.

Above all, they are determined to protect the euro, because it is the one weapon that ensures that there can be no backsliding. The euro was put in place so that, whatever temptations – or even imperatives – there may be, there can be no going back. The grim and unrelenting disciplines of neo-classical economics demand nothing less.

For many of us, this imposition of a single monetary policy and discipline on a hugely diverse European economy was always destined to fail. There was no way that small and underdeveloped economies like Greece could survive competition from a powerful German economy, especially when it was the Germans who had the power to decide on the monetary policy that should be put in place – and no prizes for guessing whose interests that policy turned out to serve.

The irony is that is those powerful interests – represented by the IMF, the European Central Bank, and the European Commission and obliged to follow the dictates of the German Finance Minister – who now find that, despite the disparity in power between them and a bankrupt and demoralised Greece, it is they – and not the supposedly feckless Greeks – who have the responsibility for saving the euro.

With the power of the referendum result behind him, Prime Minister Tsipras can now say that there is nothing more he can do. Ravaged by austerity, Greece has no resources left. Unless they are helped by a bail-out package that does not drive them deeper into collapse but instead gives them a chance, over time, to begin to grow again, they will be forced – since there is no other option – to leave the euro and seek their own salvation.

The Greeks have, in other words, taken their decision. There is nothing left for them to decide. The ball is now in the court of Europe’s leaders. It is not for them to give up entrenched positions. It is up to them to decide whether to refuse to help, with the result that Greece will have to leave the euro whether they like it or not, simply to survive, or to relent and offer a more acceptable and realistic package that will keep Greece afloat and allow them to stay in a re-shaped common currency.

We know what they want to do. They have stuck to the current stance in the hope that the Greek government will fall and “regime change” will be brought about. There has even been talk of a government imposed on the Greek people from outside or of a government of “technocrats” that will do the bidding of the financial establishment. The referendum result, though, seems to have put paid, for the time being at least, to that disgraceful objective.

But, for a brief period, the Greek crisis has given us a glimpse of the mailed fist and doctrinaire rigidity behind the “European” ideal. Rarely can there have been such a stark demonstration of the inherently undemocratic nature of the European power structure and of the interests it truly serves.

It may be that the Greeks, by forcing an “agonising re-appraisal”, will end up having done the true adherents of a united Europe a favour. It may be that, at long last, we will begin to contemplate a Europe based on agreement freely given by the continent’s governments and peoples, an agreement to build a Europe by learning from each other how to work together and to cooperate more closely, a functional Europe that will do those things that are best done together rather than separately, a “bottom-up” Europe that will develop as a result of, but not getting ahead of, a growing sense of European identity and the wishes of its peoples.

We need a Europe, in other words, that is not just a vehicle for advancing powerful interests, and riding roughshod over everyone else, but that understands that the Greek poor and unemployed are just as important, and just as essential, to Europe’s future, and that enabling them and millions like them to live a better life is both a united Europe’s true purpose and its only real chance of success.

Bryan Gould 

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