1. Paul Krugman, political economist par excellence, meaning of course, he's the best at being superficial and mediocre, has published a column in today's New York Times comparing Syriza's Greece to Weimar's Germany. Those VIBs, wannabee Howard Stern mini-mes, green reds (and vice-versa), international socialists, Jeffrey Sachs embracers, rebuild the 4th internationalists, all so busy applauding Syriza with both hands have yet to cite comrade political-economist Krugman's column, despite the fact that like Krugman, superficial and mediocre is them at their very best. Apparently, while endorsing a bridge loan is ok for these never-close-to-being Marxists, endorsing a Mediterranean Weimar is a bridge too far.
It's an ironic analogy, Syriza Greece to Weimar Germany, irony being what happens when ignorance meets history. After all, in this iteration, Greece is demanding war reparations from Germany, and Germany is adamant that Greece fulfill the terms of the 2012 Versailles agreement despite the toll the payments exact on the viability of the economy, and on the welfare of the populace. Isn't that ironic?
It's capitalism, where ignorance of history is a science, and we call the science "political economy." (See, for example, the career path of Alan Greenspan)
2. To Germany's finance minister, Wolfgang Rollerblade Schäuble, "The problem is that Greece has lived beyond its means for a long time and nobody wants to give Greece money anymore without guarantees." Short version: "Pay me." That's all the political economy Wolfgang, or anybody else, really needs to know.
However, Herr Rollerblade's analysis doesn't exactly correspond to the reality. As a matter fact, Greece, that is to say the agents of the bourgeoisie of Greece being therefore at the same time agents for the bourgeoisie in general, "conducted" the economy of Greece along the lines of the business model endorsed, recommended, and otherwise imposed by those political economists of the invisible hand; the ideologues of free markets; those slick, facile, vicious, greedy fucks who make the P2 Masonic Lodge look like a foundling hospital.
We have all heard the invisible handlers rail against taxes on profits, as such levies strangle the willingness of entrepreneurs to "take risk," to "create wealth." Well, they were listening in Greece where for every year from 2003 to 2012 tax rates on corporate profits as a portion of GDP have been below the average rates for the OECD (Organization of Economic Cooperation and Development) as a whole.
Moreover, that rate in Greece has declined steadily from 2.8 percent of GDP in 2003 to 1.12 percent in 2012.
Similarly taxes on personal income as a percent of GDP in Greece have been about half the rate for the OECD as a whole.
Workers in Greece certainly did not live beyond their means, or beyond the productivity improvement they provided to Greek industry. Labor productivity improvements in Greece, measured as GDP output per hour worked, equal or exceed those rates for the OECD in every year between 2000 and 2009. Labor productivity growth in Greece was among the highest in OECD countries for this entire period.
Trade? Exports of goods and services increased from 18.6 percent of GDP in 2003 to 23.6 percent of GDP in 2008. In 2013, exports accounted for 30 percent of GDP, but of course, with the GDP down by one-quarter, the value of the exports is below that of 2008.
3. So we have any economy that certainly isn't taxing anyone's income or property or profits at a burdensome rate (provided you exclude the regressive taxes on consumption which increased 25 percent 2000-2012). We have a labor force whose productivity is certainly not a drag on the economy. We have an economy that is increasing its exports.
We also have an economy that was increasing its imports, at a rate, and mass, greater than exports, and the terms of trade were to the benefit of Greece's partners.. Half of Greece's trade is with other members of the European Union, and the import of manufactured goods is the largest single category of that trade. Greece's ability to service its debt since 2012 has been based on the dramatic reduction in imports, that is to say manufactured goods for consumption and/or further production.
The value of manufactured imports increased 60 percent between 2005 and 2008.
The driving force behind this increase in manufactured imports prior to 2009 was the concentration of fixed capital formation in Greece's household and dwelling sectors.
Greece's dedication of fixed capital percentages to the industrial sectors, for machinery and equipment, has historically been below that of its trading partners, until 2006 and 2007. Commitments of fixed capital to the transportation and the constructions sectors have been greater than that of its trading partners.
The model that Greece was attempting to "emulate" was a "post-industrial" model where Greece would, so its political economists and ruling class thought, would prosper by capturing a portion of the wealth circulating through the European Union through tourism, through hotels, through hosting, transporting and clearing commercial transactions, which would be accomplished through the construction transportation networks; and the construction and purchase of homes by those wealthier capitalists unfortunate enough to live in the colder and greyer climes of Europe. Our slickster trickster politicians and economist thought they would turn Greece's disadvantage, its relative lack of industrial power, into a comparative advantage.
Here our political economists thought they were "flipping" the lesson of uneven and combined development and that Greece could skip over "industrial capitalism" and move directly to "post-industrial capitalism" all the time preserving, maintaining, enhancing the power of Greece's bourgeoisie.
Of course there is no such thing as "post-industrial capitalism," no more than boutique production can ever escape the laws of capitalist accumulation.
Ironic, isn't it, irony being what happens when ignorance meets history? "We're erratic Trotskyists," proclaimed the political economists. "We'll take the telescope, but not the revolution."
4. Herr Rollerblade talks about the obligations Greece must execute. He talks about the obligations as being "a plan" to "make Greece competitive." Making Greece competitive is about as non-sensical as the previous "plan" to make Greece "post-industrial." In a world where capitalism is beset by overproduction in sector after sector, from textiles to flat screen TVs, making Greece "competitive" while preserving capitalism is an absolute impossibility. The programs imposed upon Greece by the 2012 memorandum are programs of devaluation, asset stripping, asset liquidation, and outright destruction.
That is the function debt plays in this "moment" of capitalism; it is the reason why the debt must be serviced, and preserved...by the agents of capital.
It is also the reason any advance of the workers and poor of Greece begins with the simultaneous repudiation of the debt in its entirety, and the repudiation of the claims made by Syriza for "reparations." Demands for the payment of claims by the bourgeoisie, whether of the "Weimar" type or the "Entente" type, are claims of capital on capital for capital.
5. The Syriza government is not a "workers government," representing some sort of intermediary or transition to workers power. The Syriza enthusiasts forget or are oblivious to the obvious that what makes a "workers government" is not what is going on inside the government buildings, but what is going on outside. The only viability that such a government can attain is derived from the self-organization of the workers into the associations that will replace the government itself.
The struggle in Greece has not yet advanced to that level. It will. Syriza will have no role to play in that advance. And that won't be the least bit ironic.
February 16, 2015