Most likely prodded by my previous
posts about the overall ineffectiveness of the solutions the “new old left”
parties in Europe were proposing for the ailments of our current socioeconomic
system, the week has presented us with some outstanding contributions to the
public debate by two of their most prominent figureheads. First, my countryman
Pablo Iglesias, head of Podemos, penned this nifty little piece in the
Grauniad: Platitudinous Pablo Pleas for Pleasant treatment of Greece (if at least it was originally written by himself, and as a former university
professor he shouldn’t stoop to hiring speechwirters for little compilations of
platitudes and stereotypes as these, it already raises him a notch above your
average functionally illiterate politician); little afterwards, the very
notorious (and not necessarily for his academic contributions, the press is
fickle like that) Yanis Varoufakis, finance minister of Greece since Syriza won
the latest election, used the space afforded to him by the very newspaper of
reference that has come to epitomize mainstream media to insist on the same
vein in this very similar piece: Bruce Willis lookalike poses as tough negotiator
Why
this coincidence, we may ask? Well, for Greece the rubber has finally hit the
road (more prosaically, the shit has already hit the fan) and they are in
discount time towards Grexit, a most dreaded scenario because of the
uncertainties that come with it. After having campaigned on the premise of a
free lunch (again, like politicians of every sign in every age are wont to do),
this time in the form of a painless renegotiation of their debt terms with
their European Union partners, they have to face the harsh reality of the
unyielding nature of creditors everywhere, specially ideologically distant
ones. They may choose to stay in the Euro, and essentially maintain the harsh
austerity measures they so vilified the previous government for agreeing to
accept, or send those measures to the dust bin and leave the Euro (for which
they will have to improvise a lot, as famously nobody in all this years spent
any time thinking how such an exit would be effected). Our friend Varoufakis
just tried to buy himself a little negotiating leeway by doing the media
equivalent of throwing the steering wheel through the window when playing a
game of chicken (more technically, in terms of game theory he seems to be so
fond of, he is signaling to the other part the high price he is willing to pay
rather to renounce his demands), with the following message: “after publicly
stating we would never back down, you cannot expect me (my government, the
whole people who elected us) to loose face and now accept your starting
conditions”.
The advantage for the Troika (or the
Ecofin negotiating in their name) is that they don’t have to resort to those
slightly desperate maneuvers, as they are not really accountable to any
electoral body, so they can be as reckless or as cautious as their character
impels them to be, the consequences be damned (which makes for a much more
comfortable, and potentially more successful, depending on how you define
success, negotiating strategy), and were I to bet I would put my money in them
getting their way rather than the Greeks getting theirs. As an aside, Iglesias
does have a dog in this fight which explains the timing and time of his own
article, as the exit of Greece from the euro (and even worse, the potential
subsequent implosion of their economy after a massive capital run) would be
very bad news for him, giving fresh ammunition to the leading parties in his
country, which he is willing to displace, and which would no doubt point to the
Greek drama as a cautionary tale of what would happen in Spain were he to gain
power. Note that were he to really believe in the soundness of his political
receipts, that is not necessarily a bad thing in the medium term, as for the
next electoral cycle (he should assume) the social policies Greece would be
able to freely pursue once outside the straitjacket of European
deficit-obsessed, austerity-imposing, elite-dictated policies would cause it to
recover economically much faster than her erstwhile partners, and would then
become an exemplar and a beacon for progressive policies everywhere else.
But I do not think Mr. Iglesias (or
Mr. Varoufakis, for what it’s worth) does really believe in the soundness of
their policies in the first place, or they would have advocated leaving the
Euro from the get go. So the safest bet for him is to win not the next election
in five years time (which would require him to manage an newly minted
organization under the harsh limelight of intense public scrutiny for all that
long, no small task), but win the immediate one, cashing on the dissatisfaction
of the electorate with the incumbent parties and in the nadir of the crisis
that austerity has imposed on most of society. The possibility of economic
recovery is very bad news for him (although, again, being consistent he should
believe that such a recovery is a mirage, and can not happen, as the economic
consensus is wrong and can not deliver growth and/or an improvement in most
people’s living conditions).
Now, coming back to this post title,
does it matter at all? In the big scheme of things, probably not. We in the
West better get used to a long phase of low growth, and soon of nearly
permanent recession, as the double whammy of demographic contraction and
technological stagnation kick in. It really doesn’t matter what policies the
government pursue: high indebtedness (which will not cause interest rates to
spike, as money has nowhere else to go in a landscape of universal low growth
and low yields) or low indebtedness; high taxes or low taxes; high public
investment (the aggregate demand is not going to budge, as the private sector
becomes more and more aware the mass of new consumer lining up to buy their
products, and thus justifying new investment in additional capacity, is not
going to materialize because ooops!, they just have not been born at all) or
low public investment; Keynesianism or monetarism… More or less debt is not the
solution, and if that is the case, more or less austerity is just a means of causing
unnecessary suffering in the population (as reducing debt in no way improves
the economic prospect of the nations that do it), the solution is to reengineer
society’s operating system so it stops working only under the illusion of
unceasing growth in the ability to produce measurable quantities of material
goods. And a first step in that direction is to wean ourselves off from the
need to work as many hours as possible, regardless of station, inclination or
desire. And I hope every reader of this blog already knows what the first step
of that weaning off is…
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