SYRIZA, the Left and the long, slow, painful death of the nation state

by Jehu

I have been reading this post-mortem on the collapse of the first SYRIZA government, Greece and the “SYRIZA Experience”: Lessons and Adaptations. My purpose was to see if I could gain some fresh insight into SYRIZA’s failure and some fresh idea of how to recover from that failure.

The writer begins on a good enough footing:

“SYRIZA failed to stop austerity and neoliberal transformation in Greece.”

Okay, how did it fail? According to the writer, SYRIZA failed because it chose to remain in power, thereby becoming the new, Left, face of austerity and accepting limitations of national power in the European Union and euro common currency.

TitanicIn perhaps less diplomatic terms, SYRIZA accepted the domination of the ECB and EC over the Greece nation state and the corresponding lack of any effective Keynesian economic policy in the middle of what can only be called a full blown depression. By accepting these real limits on its room to maneuver, rather than resigning office, SYRIZA threw away the opportunity to retreat gracefully once it realized it was completely outmatched by the EC and ECB. Thus, a defeat was turned into a rout and utter disaster for the Left in Europe.

Karitzis believes subsequent events have shown that there is no common ground between the working class and the IMF, ECB and EC. Either the working class will press its case and win, or they are in for more hell. Moreover, by not resigning en masse to protest the terms being dictated by the troika, SYRIZA was adding to the delusion Greece had any options but to submit to the troika:

“[There] is a danger of underestimating the brutal strategic defeat that we all suffered in 2015, hiding from ourselves the extent of our current impotence as regards any serious challenge to financial despotism.”

What is the extent of our impotence in confronting the ECB and EC? Further, what is this “deeper, structural weaknesses of the left”, that goes well beyond simply the weaknesses of SYRIZA? Karitzis explains:

“The neoliberal EU and Eurozone has transferred a bundle of important policies and powers that once appeared to belong to the nation state out of the reach of the people. At the same time, a vast array of neoliberal regulations and norms govern the function of the state In the EU and Eurozone today, the elected government is no longer the major bearer of political power.”

The Left’s strategy has long been premised on capturing the existing state and leveraging it to realize the demands of the “popular classes” (whatever that means). Those days are over.

Greece’s sovereignty was not stolen

But note, the argument here is couched in the passive voice. According to the writer, the EU transferred the power of the nation state to itself. Somehow, in the dead of the night, without anyone the wiser, the EU snatched away Greece’s sovereignty?

Really? Greece had no role in this? Greece did not voluntarily transfer its sovereign powers to the EU? I think, we can all agree Greece no longer has the sovereign power it once had without leaving the impression this was an injury done to Greece; not a self-imposed catastrophe. Greece willingly gave up its sovereignty for membership in the EU and the common currency and we all saw it happen.

Rather than acting like this was a case of robbery, why doesn’t Karitzis admit Greece voluntarily chose its course — even lied to get in. Yes. As everyone also knows, Greece deliberately hid a huge mass of debt to gain entry into the EU, helped by Goldman Sachs. Greece was, from the start, a subprime borrower and EU membership lowered its interest rates.

Everyone else knew Greece was lying too, but they already had a plan in place: Greece would come into the common currency and borrow to its heart’s content at relatively low interest rates and, at the right moment, the EU would use the debt to squeeze Greece’s working class. Using its debts as leverage, they would denude Greece of every asset, break its social net and crush its unions. Greece’s working class would be forced into austerity as the price for membership in the EU.

When 2010 came, the IMF, EC and ECB already had the plan in place for this class war. Once the recession began and GDP started falling, the troika pounced and locked Greece out of the bond market.

The plan called for “internal devaluation” — an unheard of strategy in the post-war period. Keynesian policy typically called for using devaluation of the currency to slash wages and domestic consumption. This tool, however, wasn’t available because Greece no longer controlled its currency. To repay its debts, therefore, Greece would have to do what all capitalists do when facing bankruptcy: slash wages, lay off workers and tear up agreements. It goes without saying, the troika internal devaluation plan failed miserably, but not before burying the two major parties.

And then something no one had planned for happened: power fell to SYRIZA.

The Left never got the memo

Nothing I am saying here is news to anyone the least bit familiar with Greece. So how do what the writer calls “the deeper, structural weaknesses of the left” play into this discussion?

The writer explains it this way:

“In western societies, the left, but not only the left, of a robust democratic constitution has been trained to do politics within the coordinates of a post-war institutional configuration.”

I think what Karitzis is trying to say is that the Left thought conventional state management, using Keynesian economic policy tools, was still useful. In this scenario, the state would engage in counter-cyclical deficit spending until full employment was restored. Running deficits would also gradually depreciate its currency within the world market, reducing imports, and, of course, cut the real wages of the working class to maintain capitalist profits. That basically is what Keynes suggested during the Great Depression and it was mainstream economic thought until the 1970s, when it blew up.

Now, for some odd reason, the Left never got the memo that Keynesianism was dead and they maintain faith radical Keynesian economic policies are still possible if they could just get into power. However, as Karitzis explains, even the possibility of Keynesian economic policies went away once Greece agreed to give up its currency and join the euro. But, again, the Left never got the memo on that either. The Left continued to pleasure themselves with the delusion Keynesian policies could work if the Left just got into office. The most often cited plan was to gain political power and leave the euro.

The only problem with this radical Keynesian plan is that almost no one in Greece wanted to leave the euro in 2015, and they still don’t want to leave the euro today, even after six years of internal devaluation hell.

So when the writer argues:

“Today the elites feel confident enough to openly defy democracy. Democracy is no longer a sine qua non.”

This, in fact, is utter and complete bullshit. Surprisingly, the voters of Greece overwhelmingly favor remaining in the euro. In this sense, “the elites” are supported by the democratic will of the majority of voters. As difficult as it might seem to accept, democracy is on the side of “the elites”, not the radical advocates of Grexit.

Everyone knows this, but it doesn’t fit the narrative so everyone (the writer included) wants to make it go away. The fact is the parties who want to leave the euro can’t get elected; while the parties who want to stay in the euro can get elected alright, but they can’t do anything about the troika imposed austerity, because — you guessed it — they have no tools to reflate the economy.

When Greece joined the euro, it lost all means to control the economy through countercyclical economic policies. It could get them back if it left the euro, but two things pose a problem: first no one in Greece wants to leave. Despite all the Leftist nonsense about how “undemocratic” the EU is, every poll shows near complete support in Greece to stay in it.

Second, even if Greece left over the explicit preferences of the voters, the disasters in Venezuela and Brazil suggest Keynesian policies aren’t effective in an open economy. Which is a big problem for the radical Keynesians: As a member of the European Union, Greece is as open an economy as you can get without actually being a province, (okay, you can say colony), of Germany.

No idea how to fix this clusterfuck

But here is the thing: Andreas Karitzis is not telling us anything we did not already know by the time SYRIZA came to office in Jan 2015. We already knew (a) the troika internal devaluation program had failed; (b) that, with this failure, Greece had no tools to reflate its economy and reverse the massive damage done to the economy by the troika’s program; (c) and that new SYRIZA government had no idea how to fix this clusterfuck and no good choices.

SYRIZA’s conventional options consisted of two choices: double down on six years of austerity by leaving the euro, and using a neo-drachma currency to forcibly slash wages even further. This conventional Keynesian approach, according to some estimates, could drive down wages a further 20 to 50% on top of what has already been imposed by troika internal devaluation. Or SYRIZA could have accepted the troika’s terms, but negotiate for some small program to address the humanitarian nightmare the troika program had created.

In other words, SYRIZA went into government with no real plan and no real option except to rely on the morality of the same people who had already destroyed Yugoslavia and Iraq and were now busily destroying North Africa.

Was this naive?

You betcha!

Karitzis cites the President of Portugal, who argued he appointed a pro-austerity government to save the country from naive assholes like SYRIZA, who “still insist on people’s right to have access to crucial decisions, while at the same time they do not have the power to shape these decisions.”

This is SYRIZA in a nutshell.

Despotism without a subject

The troika may have completely botched Greece’s internal devaluation program and created a humanitarian disaster, and they may have killed two major political parties and brought down multiple governments in the course of forcing their harebrained scheme of internal devaluation on the population of Greece, but damn if they were going to admit failure.

Germany’s banks made a killing lending to Greece and they had no intention of letting Greece squirm out of its obligations. (I mean, be serious, when have debt collectors ever cared about whether you can actually repay your debts without starving?) Did SYRIZA really believe it was going to walk into a room of lenders and find the sympathy they had not given to Pasok and New Democracy. Samaras just didn’t want to be the guy who signed the inevitable agreement. If an agreement was at all possible on anything like acceptable terms, Pasok and New Democracy would have made that deal.

It is entirely possible Pasok and New Democracy had helped devise the failed internal devaluation program from the beginning. That everybody was in on the plan except the knuckleheads from SYRIZA, who clearly did not realize they were being set up to hold the bag.

Of course this is all my speculation.

In any case, Karitzis errs, I think, in making this a problem of the evil troika despots versus democracy. He writes:

“It is evident today that the EU is an openly anti-democratic institutional structure. The left must embrace the crude reality: in Europe a new kind of despotism is emerging.”

In the first place, Karitzis knows or should know that despite six years of bitter austerity, almost no one in Greece wants to leave the euro. All the troika had to do was raise the possibility of this happening to force the government to concede to its demands. If the EU is a new kind of despotism as Karitzis asserts, it is a peculiar kind of self-despotism, the sort of despotic popular will that drove GM and Boeing workers to bargain away their children’s futures to keep a job today.

Global capital versus national states

While Karitzis may be correct to argue we are seeing the rise of a new kind of despotism across Europe, the question remains whether he believes this despotism simply reflects purely financial forces or points to deeper forces at work within the real economic structure of society. To put this another way, it is unclear from Karitzis essay whether he thinks this problem can be fixed on the national level or requires a complete alteration of social relations on the European level and the world market.

Karitzis speaks of a financial despotism, as if this crisis is driven by finance capital. However, in a recent essay, Badiou has called attention to the collapse of the nation state, arguing that it reflects real changes in the mode of production. Capitals, Badiou argues, are no longer confined to nation states and operate over multiple countries, often much bigger than the GDP of their home country:

“Concentrations thus proceed at the same time as privatisations and destructions accelerate. … Clearly the aim is strictly financial, and is characteristic of a purely capitalist fusion, with no public interest. These concentrations thus progressively create poles of power that are comparable to states, if not more powerful than some states. These are financial concentrations of power, sometimes productive, speculative, always involving a substantial personnel, often endowed with powerful militias, and they spread everywhere, often by force, always by corruption. These concentrated poles are transnational, even if they have a diagonal relation to states. In regard to these massive transnational powers, state sovereignty cannot at all be taken for granted.”

In much the same way as earlier epochs saw the formation of the national market and the removal of barriers on the movement of national capital, we are witnessing a similar process taking place at the level of the world market. On this view the nation state has outlived it usefulness as manager of a national capital precisely because the national capital is no longer national. Even though the most important sections of the working class are employed by capitals that are no longer national, the Left continues to behave as if the nation state remains the natural center of gravity for the class struggle.

This, I think raises the rather stunning possibility that SYRIZA went into government fully believing it was engaging (admittedly complex) political forces of PASOK, ND and the ECB, EC and IMF, when they were actually (and perhaps unknowingly) rushing headlong, Titanic-like, into a submerged iceberg: namely, huge global historical forces that had already determined the outcome of the confrontation in advance.

Think of it this way: Mario Draghi could bring the Greece economy to its knees without an army, simply by financial means; but Draghi could employ those financial means precisely because production, trade and the banking system of Europe are so densely networked as to be a single economy, divided though it is into many insignificant nation states. It is not simply the case that the sovereignty of these states were ceded to the European Union; production, commerce, banking etc, are today carried on as if Europe is a single country.

Thus it is not accurate to say SYRIZA capitulated because Draghi pulled the plug on Greece’s banking system; Draghi could pull the plug on the banking system because there is no longer any such thing as a Greece economy.