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Costas Lapavitsas
Journal of Modern Greek Studies, Volume 28, Number 2, October 2010, pp.
293-310 (Article)
Costas Lapavitsas
Journal of Modern Greek Studies 28 (2010) 293309 2010 by The Johns Hopkins University Press
293
294 Costas Lapavitsas
Brussels demands that it should be. The failure of the state reflects the
failure of the ruling class at the moment. The state depicts and reflects
the ruling class. Its society has failed. Its class has failed, and its state
has failed as a result.
What will the measures do? What will happen? The measures are
disastrous. Theyre not only disastrous because they take away so much
income from people and impose taxeseveryone can see that. More
fundamentally, theyre disastrous because there is no way out if these
measures are followed. It doesnt require science or economics to under-
stand this. Consumption is declining. Investment is weak and falling in
the climate of uncertainty. Exports, which are not a particularly large
part of aggregate demand, cannot rise as a result of devaluation. Where
will growth come from? It will not. So the most likely outcome is deep
recession, and its result is, of course, default. Default is almost certain.
I dont believe the Greek State will avoid default, probably in 2011. The
money that has been given simply buys time, and it buys time to rescue
the French and the German banks and possibly prepare some defenses
for the Portuguese and Spanish economies. The Greeks are doomed in
that respect.
The real question is how will default be handled. It isnt whether
it should happen. There are people on the left who think, lets go for
default; they think this is a revolutionary and radical position. Actu-
ally its not, because defaulting can happen in many ways. Default can
happen by being managed by the IMF. Default can be managed by a
conservative Greek government. If we want a radical position in this,
weve got to demand that default is managed in the way that is in the
interests of the broad majority of Greek people. That default actually
opens up new paths for the Greek economy and breaks the deadlock
in which it finds itself at the moment. I would argue, then, that default
must be accompanied by a policy of exit from the Euro. The Eurozone
has been disastrous, for reasons I have touched upon, and I think that
there is no future for Greece within it. I think exiting from the Euro is
a position the left should seriously consider. However, if there is an exit,
and a default to accompany it, obviously other measures must be taken
very quickly because its clear that the banks will find themselves in a
bankrupt position. Banks will have to be nationalized. There can be no
ifs, ands, or buts about this. If that were to happen, other parts of the
national economy will have to come under public control, because either
they will go bankrupt themselves or their conditions of existence will be
severely affected. What that would betransport, energy, and so onis
for the left to work out. We need a program and a strategy on this.
The next thing that should happen is capital controls. If you have
Interventions: The Greek CrisisPolitics, Economics, Ethics 297
any program, any set of actions of this type without capital controls, it
will drag its feet. It will not be able to work. Next, there must also be
protection of workers income from the impact of exit from the Euro.
Finally, some kind of industrial policy must be put in place and some
kind of path to development, some kind of growth, must be worked out
to move the economy away from the situation of 7172% consumption,
next to no investment, and a huge current account deficit.
All these things, of course, cannot happen without some kind of
destruction of the state. The present Greek State is completely incapable
of delivering these changes. Were talking about profound political
change that will produce a state that can tax, a state that can transfer
income, a state that makes income and equality an important consid-
eration in how it operates, and tries to effect some income distribution
that Greece needs very badly.
Who will do all this? Clearly there are social and political require-
ments. A different alliance of social classes needs to go closer to power
in order to affect a shift of power away from capital and towards labor.
The social layers that hold power in Greece are bankrupt at the moment.
However, there are clearly working class layers in the cities, huge small
business type, professional type layers in both city and country, and of
course farmers, who are desperate for an alternative policy, desperate for
a social alliance that would bring some kind of shift out of the current
deadlock. A social alliance, then, of this typeand I believe with working
people being the natural leader in this. Politically, that would require
a front, a political front. The left must be at the heart of it. Unless the
left comes up with these ideas and suggestions, no one else will. The
left must go beyond its own weaknesses, beyond its own factionalism and
all the rest of it, which you know very well; it must position itself in the
center of a broad front that can take on the measures that are being
imposed on the Greek people, and begin to develop the alternative
program that I suggested.
Is this likely? Actually its more likely than you think. Things at the
moment are careening out of control in Greece. People are looking for
alternatives. Theyre not moving to the left necessarily, but theyre looking
for alternatives. They are open to radical ideas. If they dont find them,
and if the left cannot come up with coherent alternative ideas, they might
go to the right. They might do something else. Therefore the time is
now. It is for the left to work out how to take advantage of it.
Kevin Featherstone
Peter Bratsis
Since it looks like our presentations will take more the form of a debate
than we thought originally, I think I would like to challenge some of
Kevins arguments and assertions. First of all, we have in the current
discourse on the crisis in Greece certain contradictory arguments
about why the PIIGS, as Kevin alluded to them, are all in crisis. PIIGS
is a troubling term for many of us. That it can be printed freely in the
New York Times, Wall Street Journal, Financial Times, is itself a sign of the
routinization of racism. Why are the PIIGS, like the Greeks, pigs? They
are pigs because they cannot control their urges. They cannot refrain
from immediate satisfaction: an easy job, retirement at 42, with a beach
house and maybe a chalet in Switzerland (if they have at least been a
member of Parliament). As opposed to the good white people who are
civilized and trained and can work dutifully up to at least 73 and 74 years
old and pay more than their share of taxes for the Greek citizens. Their
answer to the Greeks and the other PIIGSwho will, Im sure, have a
similar crisis in the near futureis clear: you expect us to sacrifice our
immediate wellbeing for you? You expect us German taxpayers to pay
our tax money to you lazy people? If civilized means we sacrifice our self
interests, or at least the immediate self interest, for longer term collec-
tive good, then the Germans very happily (if they were really civilized,
unlike the PIIGS), should say, yes, please; here take this money, you
need it, we are willing to sacrifice. But they dont say this because they
are pigs like the Greeks.
Secondly, the idea that corruption and clientelism are the sources
of the crisis is a completely ideological, metaphorical understanding of
the problem. It goes back to the old colonialist idea that the cause of
302 Peter Bratsis
poverty in the south is because the people are not hardworking enough,
not civilized enough, and corrupt in general. Why? Corruption in the
case of Greececlientelismis not qualitatively different, from the stand-
point of how public policy is made, from what happens in London or
in Washington or in Paris or Berlin. If corruption is a problem because
private interests infiltrate the policymaking process and result in policy
decisions based more upon private good rather than public wellbeing,
this is no different than the way the city of London controls the British
Parliament. One could argue that the difference is that in Greece, these
processes are personalized. In the eyes of the good white Europeans, it
looks like being dirty. From the standpoint of public policy in general, it
is difficult to argue that one system is inherently better or more efficient
at creating policies that are good for everybody. Public policy in Greece is
very bad. Its not because of clientelism, however; its not because private
interests are able to easily enter the public sphere, because thats also
true here in London. Its also true in Paris.
In the popular understanding, the Althusserian idea of the sponta-
neous ideology of the crisis is related to the racism, ethnicity, the dirty and
the clean. And this is, in my mind, a sign of the failure of the European
project. Lets keep in mind that the European project, as it was conceived
initially, was not simply to create an economic common market. It was to
create economic interdependencies so as to minimize the possibility of
violent political antagonismsinitially in France and Germanyso we
can avoid another world war. Lets create economic interdependencies
in such a way that whatever conflicts may arise in the future, they will
not result in war. Our existence is dependent on each other. Beginning
with these principles, which even those of us on the left can appreciate
and respect, we should organize ourselves in ways to minimize killing
each other. Now, it works the opposite way. The interdependencies are
such that a lot of the money goes to Germany or France and so forth.
The money sent to Greece didnt go to buying coffee and cigarettes. It
went to building the metro by Siemens, and to Volkswagen for all its
cars that the Greeks buy; it went to the wellbeing of the Germans. These
interdependencies make it more likely that we will have, or are seeing,
violence and conflict within Europe grow.
So this tells us something about the contemporary political moment
and the incapacity of economics in itself to solve anything. We need a
return to the question of politics, the question of organization, to the
question of culture and civility. Lets forget all the easy answers (i.e., its
a question of good policies, of not being corrupt, of being honest, of
being hardworking). We know for sure that they have been no good.
UNIVERSITY OF SALFORD
Interventions: The Greek CrisisPolitics, Economics, Ethics 303
Stathis Kouvelakis
in the context of the so-called welfare state, have to bypass these stable
forms somehow and reach some purely particularistic or fractional form
of fulfilling certain immediate interests via practices such as those men-
tioned before. But this is much more the case of the permanent classes,
of course, and the dominant groups. What we call corruption in Greece
just means how obscene and how incestuous the relations between frac-
tional capitalist interests and the Greek capitalist state as such are. This
is exactly, I think, what we are talking about.
What are the possibilities that are opened up by the structural
weakness of the Greek State? I would point to two of them. The first has
to do with the relative position of the Greek national formation within
the international division of labor. I think that one of the main interests
of this very important piece of research produced by Costas Lapavitsas
and the whole group of economists working with him is exactly the way
it updated and made relevant the analysis about this division and the
polarizing effects of the core/periphery division in Europe. We have to
distinguish two levels of periphery within Europe. The first with Greece,
the south, and the so-called PIIGS, and the second will be the peripheral,
which means Eastern Europe, of course. The weakness of the Greek State,
in the context of the shock therapy, just means the loss of the remnants
of what can be a form of national sovereignty. Which means also the
erosion of a level of control of the popular forces in the state and the
disorganization of the representation, of the relation of representation,
between the state and the factions of the dominant class. This downgrad-
ing of the position of the Greek State within the international system
will have far-reaching consequences. It is within this context that the
popular forces have to situate their own struggle, elaborate their own
strategy, and operate their own system of allowances on a European and
on an international level.
The second consequence of that weakness of the Greek State, to
put it very simply and a bit more optimistically, is that it opens up the
possibility of direct intervention of the popular forces. Indeed, as we
all know, Greek history and even recent events in Greece have been
characterized by exactly this direct intervention of the popular forces,
of the popular struggles in the political scene. Because it is important
to understand that what happens today just gives us a taste of what will
follow in the forthcoming weeks and months, I will offer some examples.
In 2001, an uprising of the Greek Trade Union movement succeeded in
preventing the brutal and savage reform of the pension system initiated by
the modernizing government of Costas Simitis. In 2006 and 2007, Greece
was the only country in Europe where a successful student movement
succeeded in blocking many of the effects of the Bologna process, and
306 Etienne Balibar
Etienne Balibar
possible outcomes and developments. If I have one thing to say, its pre-
cisely that: within this complexity lies an absolute interdependency of
both sides. Therefore, I dont see any possibility to play Europe against
Greece or Greece against Europe, since this has practical or concrete
consequences as soon as we come to some of the most burning issues
that are at stake.
If we take as an example the issue of whether it would be the good
solution for Greece, given the catastrophic situation, the extreme likeli-
ness, as was argued a moment ago that the default will come anyway,
and whether it could be a good solution or the only possible solution
for the Greeks to leave the Euro, or whether they should remain inside.
I dont know if anyone is in a position right now to say yes or no, but I
would argue that this question cannot be discussed only from the point
of view of the Greeks. It has to be discussed from the point of view of
the Europeans themselves.
This is a bit strange to argue, since we are here in Britain, there
is something a little surrealistic, because Britain is not part of the Euro-
zone. This is not to say that Britain is not involvedand again Im no
economistif we simply agree on the idea that the problem created by
this cycle of financial speculation, state intervention, opening the pos-
sibility for a new moment or a new level of financial situation which is
now directed not only at private firms but at states themselves, is not
something that concerns only Greece. Its not something that concerns
only the Eurozone itself with its common currency, but its something
that has a much wider meaning.
I brought with me (and I hope this is not considered a provoca-
tion) an issue of the French newspaper Le Monde, more particularly, its
economic weekly supplement, considered in France and in some other
places to be a serious journal, although you may disagree with many of
its positions. (The issue was published just a few days ago, I think on May
4th, though its dated May 3rd, so you can see its extremely recent.) The
big headline is the following: United Kingdom, Greek Peril. Agree or
not with the reasoning, I think that says something about the interde-
pendency of all this.
To conclude on these general considerations, I would like to say
two things. The first is, as European citizens, as leftists and leftist intel-
lectuals, some of us, like Stathis Kouvelakis, raise the Marxist flag. Im
not against that. Others would choose a slightly different etiquette, but
there is something I believe as part of a left intelligentsia. We have, as a
first obligation, to express solidarity with the protests of the Greek people
as it is developing now for at least two reasons, which do not concern
them. The first has to do with democracy. This has been powerfully
308 Etienne Balibar
are rules according to which this help is provided. The IMF has been
implementing for decades such programs all over the world, even with
some precautions. The implementation of its plan in Greece means that
the Eurozone, which was meant to become a zone of complementarity
and solidarity among national economies in Europe, is now decidedly
a zone of fierce and wide competition among its own members. The
conclusion that I derive from this is not, despite all the good reasons we
have heard, that the inevitable outcome should be to leave the European
Union and allow its common currency to collapse and perish. I think
that result would be even worse, not only for the Greeks, but for all of
us. Some sort of radically alternative understanding and vision, both of
the European economic policy and of the European social model, is now
badly and urgently needed.
university of californiaIrvine