State Harder! Jacobin’s despicable, dishonest take on the “European project”

by Jehu

In an laughably dishonest and unprincipled article by Cédric Durand, “The End of Europe”, Jacobin demands the Left double down on its impotence.

“Uneven and combined developmental dynamics in the European periphery highlights the need for the Left to move from a defensive fight against austerity toward a positive agenda of systemic alternatives. The Greek experiment demonstrates that, on this path, there is no other choice than breaking with neoliberal European institutions and regaining democratic sovereignty on domestic currencies.”

fc8205e257e092365e142da72c149b47Jacobin has thrown all in with those who argue the European Union, the largest free trade zone in history, is a failure. Fascist management of national economies, which emerged after the Great Depression is dying and Jacobin is not amused. Jacobin calls what is happening in Europe, the “disintegration of the European project”, when obviously we are witnessing fascism’s demise.

What is their evidence for ‘disintegration’ of the European project? Well, actually, Jacobin offers no evidence at all, but the the victory for No in the July 5 Greek referendum. We are, in other words, suppose to interpret the outcome of the referendum as a rejection of the so-called “European project”.

However, there is no objective evidence that the working class of Greece ever intended the referendum to be interpreted as a rejection of the EU. In fact, polls in Greece consistently show sentiment in favor of continued membership in the EU remains in the range of 70-80%.

Yes, the July 5th referendum reflected a complete rejection of the demands of the Eurogroup and the ECB, not the European Union itself. At the same time, it reflected the impotence of the Greece state in face of the demands of the Eurogroup and the ECB. In reality, The outcome of the referendum had no impact whatsoever on the conditions Greece had to accept as the price of staying in the European Union.

Complete ideological blindness

What, other than ideological blindness, leads Jacobin to interpret the events in Greece in the last few weeks as the disintegration of the European project and not the final expression of the disintegration of fascist state economic management in Greece? Even leaving aside the question of whether Greece should leave the EU, there is little or nothing about the events on the ground that support a push for withdrawal.

Jacobin throws at its reader a very long list of economic failures produced by the European Union: slow growth, high unemployment, rising public debt, unbalanced trade and the conversion of elected governments to engines of austerity. Frankly everything mentioned in the article cannot just be shown to be true, but even understates the actual scale of the disaster in Greece: What has happened in Greece was not just the result of the financial crisis that erupted in the United States, but the deliberate imposition of a cruel and unnecessary austerity regime on the country on top of the economic crisis.

The EU went out of its way to crush the Greece economy in a way that has never been witnessed in peacetime anywhere. Under any other circumstances, what occurred in Greece over the last five years would have been considered no less an act of war than what the US imposed on Iraq and Cuba. Which makes the willingness, even insistence, of the working class of Greece to remain in the EU that much more remarkable.

If measured by the support of parties advocating Greece remain in the EU, Grexit today has less support than at any time during this crisis. You would think Left circles like Jacobin would finally admit this, but you would be wrong. The Left will never accept a result that conflicts with their ideologically driven prescriptions for society. No matter what the working class thinks, the Left knows better and has no reluctance substituting their simple-minded Keynesian utopias for real politics.

The working class of Greece has clearly articulated a very simple demand: “End austerity in a way that we can remain in the EU.” What does this mean? Strategies that rely on the government managing the economy are not appropriate, even if those strategies in theory offer a path out of austerity. (They don’t; they only offer a different form of austerity, currency austerity.) Reliance on currency devaluation to make Greece’s economy competitive within the EU (Keynesian policies) is not appropriate to the task. Keynesian growth driven by fiscal stimulation and artificially propping up profits at the expense of the working class are not appropriate. The entire Keynesian model of economic development cannot work in the European Union, because it was designed to preclude them.

And what else is in the Left’s toolkit? If the Keynesian model does not work, obviously the soviet model, can’t work either. The soviet model effectively means Greece completely withdraws not just from the EU but from the world market as a whole.

The Left has never entertained any other courses of action but Keynesian and soviet models of development and neither can work in this case. Both models of development require a strong national government, with control of the forces of production within its borders. This is exactly what the Left does not have and cannot have in a free trade zone like the European Union.

To add insult to injury, the Left insists on living in a dream world, where, any minute now, the European project will disintegrate.

The chickens of colonial barbarism have come home to roost

Mind you the Left in Europe is not the first to experience this: Mozambique and other small third world countries suffer the same condition. The Keynesian policy prescription never applied to them. Although bourgeois simpleton economists always pretended Mozambique was just like the US, this was never true. Keynesian economic policy measures only ever applied to the big advanced countries — it was always a first world, racist, model. It cloaked US and European economic conditions in the aura of economic theory that was supposed to apply to any country — but only so long as it resembled the US and Europe.

Well, now economic conditions in the EU do not resemble the US and will never resemble the US again. Just as in the case of Mozambique, Greece doesn’t have sovereign control of a currency that is accepted in the world market. It can go back to the drachma, but no one would accept it and no one will lend it capital denominated in that currency. Like Mozambique, Greece would still have to borrow in euros and dollars and repay its debts in euros and dollars; like Mozambique, Greece would still have to demand euros and dollars for its exports and pay for imports in euros and dollars.

Thus, although the dishonest and unprincipled Keynesians will never admit this, a drachma can only be used to devalue wages in euro and dollar terms. The Left finds itself in an uncomfortable position: Barbarism has come home to roost. The barbarism that was once confined to the colonies of Europe has made its way back to the very countries whose creation it was. Now the islands of prosperity in an otherwise destitute planet are threatened with destitution themselves.

It hurts, don’t it?

The Left is not going to be able to retreat behind a relative autarky imposed by limits on foreign trade and concern itself with the needs of its domestic constituents. You will not be able to erect barriers to trade and limitations on the movement of goods, labor and capital. Those days are gone forever. You will learn how to live and thrive with no more control over the productive forces of Greece than Mozambique has or you will starve. And no one will give any more care to your fate than you cared about the fate of Mozambique.

Now, I am not saying anything here that the Left did not already know in the lead up to the most recent events. Every radical Keynesian economist already knew years ago that the European Union was designed to prevent countercyclical economic policy. But did a single one of them propose a new method of fighting the financial oligarchs of Europe? Did they suggest any alternative policies other than begging these same oligarchs for handouts?

The radical Keynesians led the working class of Greece directly into a trap from which it had no hope of escape. And they did this on the basis of the most opportunistic assumption that this disaster would spark the working class to support a Grexit. Once confronted with another memorandum, the radical Keynesians hoped, the working class would choose to leave the euro. Instead, the unexpected happened: the working class said No to the memorandum and No to Grexit. The radical Keynesians were thus left with no choice but to submit to terms even worse than those initially offered.

Thus Jacobin is trying to shift the blame for the disaster that occurred in Greece on the EU not Keynesianism:

“Rule-bending, bureaucratic supervision by the commission and core governments, the installment of independent technocratic bodies controlling fiscal policy, and the enlargement of the European Central Bank (ECB) competencies has reduced the field of economic policy options for national government to the one-size-fits-all fundamentals of the old-fashioned Washington Consensus of the nineties: consolidation, privatization, and liberalization.”

Ignoring all the fluff in this nonsense paragraph, let us note Jacobin admits the limitations of the European Union were already readily apparent since the 1990s. One would think that in 20-25 years, Keynesian could have come up with some solution to the defects to “the old-fashioned Washington Consensus” that did not consist in begging Merkel for handouts. A strategy that assumed from the outset Ms. Merkel’s likely negative response to such radical Keynesian begging for more food stamp socialism.

Keynesian economic theory has led to disaster

It is important to emphasize radical Keynesianism has failed in Greece and the working class is going to pay dearly for this failure. This failure was not the fault of Merkel and Schaeuble or the European Union’s structure as Keynesians want you to believe — it is the fault of Leftists who have no strategy but a return to the golden age of fascism. Keynesians have been trying to drag society back to the 1960s for 40 years and nothing, not even outright capitulation, seems sufficient to force them to face their defeat. All the outrage with Merkel and Schaeuble is designed to shift blame for this debacle from Keynesian policies to the EU’s structure.

Of course to expect from the Keynesians original thinking would be to overlook the steady decline of the American and European labor movement of the past 40 years. In Europe’s labor movement, radical Keynesian thinking has led to defeat after defeat with complete marginalization of the radical Left within the labor and social democrat parties. Jacobin wants us to embrace this unbroken record of defeat and cling to the delusions of a bygone era.

The problem is not now and has never been what the enemy wants from us, but a Left that thinks it can live inside its delusions.