Pavlopoulos’ and Vassalos’ unscrupulous demand for democratic control of currency in Greece

by Jehu

Anti-euro advocates increasingly have to characterize the SYRIZA government as a failure. Thus, SYRIZA is trapped between bourgeois ideologues who spin its brief stint as government a failure and Leftists ideologues who do the same.

The problem: Dimitris Pavlopoulos and Yiorgos Vassalos argue that even the mildest Keynesian policies are not possible within the eurozone:

“If one thing has become clear, it is that the long-expected change of course in Greece and the EU more broadly, will not come just because SYRIZA has come to power. The question that emerges is whether things could have gone, and can still go, differently. Is it possible for a left government in an austerity hit country to apply even a mild Keynesian policy while remaining within the eurozone and the EU? The answer is simply NO!”

91KBeL9mdJL._SL1500_But it was already understood by most observers before SYRIZA won the election that Keynesian policies could not be successfully implemented within the eurozone. This problem has nothing whatsoever to do with SYRIZA, but with the structure of the eurozone itself, which essentially strips the nation state of its fiscal and monetary powers without creating an alternative authority to implement countercyclical policies during economic downturns.

The Left and SYRIZA already knew this before the elections and should not be complaining about it now.

When SYRIZA committed to remaining in the eurozone, bowing to overwhelming political opinion, its only hope was to find another avenue for ending austerity. The vast majority of Greece citizens do not want to leave the euro and Pavlopoulos and Vassalos want to blame SYRIZA for this, not the Greece voters. In fact, SYRIZA’s decision to remain in the eurozone was forced on it by the democratic will of Greece voters that the Left refuses to accept.

Frankly, Pavlopoulos’ and Vassalos’ anti-democratic undergarments are showing here; like the rest of the skeptics on the Left, they have no interest whatsoever in the opinion of Greece voters, but have decided for themselves what must be done. According to these simpletons, the crisis can be fixed with valueless currency:

“The only way for (radical) left governments to overcome these constraints is to regain monetary power by introducing national currencies under democratic control.  This would also require abolishing the ‘independence’ of their central bank and re-appropriating the capacity to create their own liquidity.  Such a programme should also include the nationalisation of private banks and the introduction of capital controls to avoid capital flight and find resources for job-creation and public investment.  Finally, it would require an end to the servicing of sovereign debt and an invitation to creditors to negotiate on this basis.

Pavlopoulos and Vassalos think they can turn sow’s ears into silk by adding the term “democratic” to their proposals. They think by calling for “democratic control of the currency”, the rest of us will ignore that the expressed democratic will of Greece society is almost completely in support of the euro already.

But if SYRIZA or any other Leftist party is willing to ignore this “democratic will”, why should we believe they will listen to it when it comes to control of the currency?

Pavlopoulos and Vassalo want us to believe the euro straitjacket is being imposed by “Schauble, Dijsselbloem, Draghi, Juncker and Lagarde”. In fact, it is not: it has been imposed on SYRIZA by the Greece working class. SYRIZA and the Left have to learn to do something new: Live within the real world limits of working class understanding.

You folks on the Left don’t know any more about how to fix this crisis than they do — you just think you do because you have a degree from some goddamned university.

If remaining in the euro means SYRIZA cannot implement even mild Keynesian policies, clearly the Greece voter no longer wants Keynesian smoke and mirrors. For five years now, the Left has comforted itself with the narrative that this crisis was imposed on Greece by PASOK and New Democracy. (“If only we could get rid of those two corrupt parties, we could go on a Keynesian spending spree and fix the crisis!”)

Well, not so much. It turns out it wasn’t PASOK or New Democracy behind austerity, but the Greece voter’s commitment to the euro that requires austerity. If Greece is to exit austerity, a way must be found to reduce the employment of living labor in production to the average for Europe.

Germany, for instance, produces all of its needs, plus a significant export surplus using, on average, only 1388 hours per worker annually. In Greece, for some god-awful reason, this takes 2037 hours per worker. Why? Are Greece workers lazier than German workers? Are they less skilled? Are they less intelligent? Of course not. They are less well paid and forced to work longer hours.

Since they are less well paid and forced to work longer hours, the Greece capitalists can employ cheap living labor while in Germany they have to use machines. Further cutting Greece wages or extending labor time does nothing to address this problem; but cutting real wages is the only thing Keynesian policies accomplish. By refusing to leave the euro, by clinging to it like some lifesaver after the economic ship has sunk, the Greece voter is simply saying, “We do not want SYRIZA to ‘fix’ this crisis by cutting our real wages.”

I am not sure what there is about this statement that is so incredibly difficult for Leftists to grasp. If asked directly, almost no Leftist would admit they think the crisis should be fixed by cutting the real wage — even if they accepted this was possible. The only answer that makes sense is that Leftists don’t think this is how Keynesian policies work. Somehow Leftists have got it in their heads that Keynesian policies have the magical ability not simply to create money out of nothing, but also real necessities like food, clothing and shelter. Keynesian policies have no such magical ability; if Keynesian policies work, it must be because the goods already exist.

And that means, in the first place, that wages are not high enough to buy the goods and this cannot be fixed by printing money — you simply raise wages. This can very easily be accomplished in Greece today without spending a dime of state cash: reduce hours of labor so everyone has a job and raise the minimum wage until no one with a job is in poverty.