European Social Democracy in decline

Quel dommage! 
What a pity. Nice idea, wasn΄t it, nice and balanced and wise and safe. 
Social democracy, such an attractive compromise. The Left would abandon its pressure for structural change, for new institutions of power and production and in return it would receive a strong state that would redistribute a good part of the profits of the rich through taxation and social services. Happiness knows no boundaries and we all become imaginary Swedes (not real ones, the real ones keep complaining). Even the US liberal intelligenzia bought into the idea. John Rawls΄ Theory of Justice is probably the strongest ideological foundation of social democracy ever writen, as Harvard law professor Roberto Unger points out. In such an orderly and fair system could anything go wrong?

Problem number one has been historically recognised by social democrats themselves : The rich keep ignoring their part of the deal. They wont stand still, they wont keep quite for just as long as we ΄d need to tax them. They hire all those lawyers, tax experts, journalists, thugs, swiss bankers, advertisers, they keep bying media and football teams, they hang around with politicians and mayors and judges and union chiefs.

When it comes to profits, they also have this catastrophic fondness of all things sure and boring rather than epic and uncertain. They would rather become rentiers or play it safe by copying a dull recipe, usually tried in very different sets of circumstances that they then call “Best Practices”. Innovation, creativity, adaptation to local environment  usually go down the drain, or serve as hollow words masking the emptiness.

What΄s left, then, to our poor socialdemocratic politicians, other than bribing, for decades on end, the rich with subsidies and sour loans and TV licences and sweet deals hoping, against all odds, that their much touted business acumen will somehow materialise and finally create a modicum of growth? Vain hopes, they are lousy… 

Problem number two stems from the voters΄ insistence that the deal be kept. And when it isnt, they desperately try to be like the rich themselves, to become rentiers, however small and humble. They try to get a place in the sun, to send their children to university just in case the frozen wheels of social mobility start turning, to get ahead of their neighbour in the rat race. It s absolutely normal in a democracy for those who lose in the economic sphere to hit back through politics. They ll start pressure groups, they ll hit the streets, they ll ringfence themselves in modern-day guilds, indifferent to the plight of their colleagues in the shadow economy, deaf to the young banging on the door, in love with nothing but their own rights.

Yes, sir, they resist, despite their struggle being branded as populism, regardless of all those moralistic old style lectures emmanating from the desks of well to do analysts and the insults directed at them by the dinosaurs of social democratic politics. But this kind of resistance leads nowhere. It was easily suppressed in Greece for more than a decade using the “credit-for-all” scheme (cheap consumer loans, credit cards), bonus-like income increases  not incorporated in the salary and fairy tales about our mature (!) stock market and the euro.

Social democracy΄s third problem is obvious to all but its followers. The problem is that after the post-war compromise, it adopted the program of its opponents. Even though it kept its ideology (now it s losing that too) its political and economic program was that of the enemy- only humanised with loads of sugar added. It fully bought into the established but scientifically baseless view that market economy has only one institutional incarnation. That it cant function in a variety of constitutional and legal arrangements. Thus, it ended up wholly accepting the financial casino and the banks΄ decision to rid themselves of their main raison-d-etre, which is funding productive investments through deposits. The banks are left to revel in their wild international parties, and to die from the consequences -at their country΄s costs. At the same time, the state is bribing rich individuals just in case they bring about growth- in the unique ways they and only they can master. Redistribution is ever more limited and unable to spur socially inclusive growth and to soften the rigid economic hierarchy.

The main goal of modern social democratic policy is to placate the purportedly wise, half asleep dragon called global money markets. European social democracy has turned into the new Metternich, into a reactionary, counter-revolutionary force, whose ideological totem is a deeply conservative world vision misleadingly branded as technocratic. There goes the challenge of post-fordian production, there go the voters, pushed towards the far right and its sizzling hot ideology. It tried to put politics to a “Big Sleep”, it ended up with the “Long Goodbye”. It has, at least, retained its good reputation. It s so easy to look like a realist when you accept everything…

In Greece, social democracy went a step further. It committed suicide. Not just by accepting the crushing and heartless bailout loans. That was a mistake, but a human one. A controlled and immediate default or a harder negotiation that would place the crucial dilemmas on the table or an orderly exit from the eurozone (even for a short period) would be objectively better, much more growth-oriented solutions. A wide array of top academics in Europe and the US (Dany Rodrik, Roberto Unger, Ricardo Hausmann, Richard Freeman from Harvard, Simon Jonson from MIT, Costas Lapavitsas from SOAS in London, Paul Krugmann from Princeton etc) analysed these solutions, whose implementation, nevertheless, required delicate handling and also entailed large costs. And of course, consensus on these let s say more radical solutions was not a given – the public was misled by the propaganda thrashed out by the current goverment (and ALL previous ones) as to how self evident and inescapable their policies are. No, it wasnt the foreign loans, even though their terms were so much more onerous  than those of previous loans.

What is vastly more disastrous is the goverment΄s insistence that it is somehow possible to avoid default on a sizeable part of the debt  (haircut). Even the market fundamentalists, the sum total (100%) of the planet΄s most respected economists, even the consultants of those who stand to lose their money (!) are absolutely adamant on the haircut. It is NE-CE-SSA-RY. The noble government blindness and the insistence that we will “return the money down to the last cent” is incomprehensible and extremely destabilising for Greece- and for the E.U. Nobody can be persuaded by senseless guarantees. The markets only look ahead, they dont give a dime about victorian values and eternal promises. The goverment is also rightfully criticised for ignoring its commitments to its citizens, as if the only contracts that count are those that bind it to its foreign creditors. We re being subjected to a new, hidden form of colonisation, but no, this is not the ultimate reason for the demise of greek social democracy. There s something even deeper.

The true crime of greek social democracy is the incredible defamation campaign presenting the average Greek as an accomplice to, if not as the ultimate responsible for the crisis, for the shaky so-called growth and the foreign loan deluge (that ended up straight in the hands of the elite). That very same average Greek who supported and believed in all those self evident big ideas, – the Olympic Games, the rule of the banks, the euro, the financial casino- just as he was asked to. The greek government sinned in that it acquitted itself and the rest of the elite while ruthlessly criminalising everyone else- particularly its own voters. Its use of fear and guilt was almost Freudian, in an all out effort to depoliticise its bailout choices, to present them as a one-way street, the only one available to every sane person. It obscured the fruitfull discussions conducted in Europe and America on bold, new solutions to the greek crisis, obsessed as it is with a primitive, idiotic form of denial. WE ACT THIS WAY BECAUSE THIS IS THE WAY WE WANT TO ACT. The government didnt even dare to open a dialog, so as not to upset the sensitive scary beast, the international money markets. Its rhetoric has targeted tax evasion, rentiers, interest groups that take advantage of redistribution but was blasted aside by the famous pronouncement of vice premier Pangalos “We all parted”, the only victim being redistribution itself. 

It terrorised the pensioners and the holders of small bank deposits claiming that they will lose (?) what little money they have, that we will become a mediterranean Zimbabwe (new drachma=200% inflation is a favorite of mainstream journalistic ignorance) an Albania of Enver Hoxha, without Hoxha.

It pushed its voters to embrace slavish fatalism and a fearfull dislike of true democracy and bold dialogue. Estranged from the need for self determination, it turned them (yet another time) into naughty children who want to wake up and realise it was all just a nightmare- no, it cant be, mummy Europe will never let us perish if we are really, really good kids.

The government would rather have us default every day out of fear, than default once and for all and do something about it. This way greek social democracy demonstrated its total submission to the alleged trust of the market vultures and to the needs of a bankrupt and paralysed banking system. And now it wonders why arent its victims in the mood for development, why dont they long for something new. Why do they keep talking about disaster, why on earth are they so,so pesimistic…

Quel dommage!

By Heracles Bogdanos
Source: thepressproject

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