workers freedom

economics as if workers mattered

Greece: No Alternative under capitalism (in progress)

Greece has capitulated, leading to celebration on financial markets and despair among many Greeks. There was no alternative, the Syriza government says, because the European Central Bank had cut off credit to Greek banks, effectively forcing them to close. And there can not be a (capitalist) economy without banks.
We are repeatedly told – and not just by mainstream economists, many Marxian economists echo this as evidence that capitalism has entered its final days – that “there is no alternative” to austerity and immiseration.
Some, more critical, suggest that there is no alternative under capitalism. But even this isn’t true. Some governments responded to the economic crisis with austerity, and paid a heavy price for it. Others leavened their fervently proclaimed adherence to austerity dogma with a light dose of Keynes in an effort to prevent total economic collapse, as did the UK Tory government. (Now, having secured re-election, they pledge to bear down on the austerity full throttle.) And some engaged in very mild stimulus policies, trying to revive the economy — the United States provides an example of the very tepid economic “recovery” that results, which is why pro-capitalist economists like Paul Krugman have been arguing for much more vigorous intervention.
There are a wide range of alternatives available under capitalism, none of which are oriented toward meeting human needs. Some focus more on restoring immediate profitability and securing timely repayment of loans; others focus more on economic and social stability, reckoning that these are essential to the long-term viability of the capitalist economic system. (Even the International Monetary Fund vultures agree that Greece’s debts can not be paid without destroying what remains of the economy, and has proposed debt relief.)
The Greek politicians were being held hostage by austerity dogmatists, and apparently could not conceive of an alternative that was not sanctioned by central bankers and financiers. But alternatives certainly existed, such as leaving the Eurozone altogether, repudiating the debt, and rebuilding economic activity from the ground up or some sort of mixed approach where Euros and local currency would co-exist. Worker-operated factories and other enterprises could build a sort of alternate economy, relying on barter or other means of exchange to create economic spaces for survival. Such approaches are entirely consistent with capitalism, and could leaving existing relations of exploitation relatively unscathed (something apparently important to Syriza). There are also revolutionary alternatives, though the challenges to building a new economic and social order in so small a space in the face of a determined and united capitalist opposition would be substantial.
One this is clear: there is nothing natural or inevitable about austerity economics or debt repayment. Indeed, as Thomas Piketty notes, Germany rejected the road it has demanded Greece follow, twice refusing to repay its debts and securing international agreement for substantial debt relief. Decades of austerity policies around the world have made two things clear: (1) austerity is the recipe the powerful impose on the weak, but never on themselves; and (2) austerity can only lead to immiseration and economic collapse.


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