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Greek Society Unravels Under Austerity Measures

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Costas Lapavitsas is a professor in economics at the University of London School of Oriental and African Studies. He teaches the political economy of finance, and he’s a regular columnist for The Guardian. Here he’s interviewed by Paul Jay of the Real News Network.


More at The Real News

Listening, it sounds like a situation with the potential to become overly dynamic. Or kinetic. This passage caught my eye:

JAY: [In] an interview I once did with Noam Chomsky a couple of years ago, he made a point which I thought was interesting, which—just how quickly German society accepted a Hitler and how quickly you go from kind of an avant-garde, libertarian Berlin to a fascist Berlin. I mean, what’s the danger of that in Greece?

LAPAVITSAS: Oh, the danger is very real. The danger is very real. I mean, the center of politics, the political organizations that have run Greece for four decades, have been hollowed out.

You see, people misunderstand. They think that the Greek state has always been very weak, inefficient, the Greek politicians are incapable, and so on. That is nonsense. The Greek state has been a very capable state and it has been able to deliver all kinds of things. You know, it’s a middle-income country. Its political system has been uniquely stable in Europe. Two parties have alternated in power and nothing has been changing for three to four decades.

Now that’s finished. That’s come to an end. These two parties are completely discredited. The center is hollowed out. And what has happened is that parties on the left and parties on the extreme right have been strengthened.

And that’s a reflection of what I mentioned to you before of the confusion, the despondency, and the anger among ordinary people. They do not look at the center any longer for solutions; they look at both ends of the political spectrum. Now, the dominant side there is the left. People look towards the left. They expect the solution from the left, from SYRIZA.

However, an increasing number of people, people who used to be to [incompr.] to the main part of the right now are looking to the extreme right. And it’s a logical thing. It’s a logical thing. If the center-right has made itself discredited, then a lot of people will look to the extreme right, which promises clean hands, efficiency, dealing with foreigners the way in which they understand that, and so on. That can be very quick. That can be very fast.

“They expect the solution from the left, from SYRIZA.” OK, and? Readers?

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90 comments

  1. RanDomino

    In 1918-19, the German Revolution consisted of a series of spontaneous and planned mass uprisings by workers and soldiers that would have probably succeeded if they had been even a little organized and knew what they were doing. Instead, they flailed around for a while doing heroic but pointless things until their leaders were shot.

    A successful revolutionary movement takes decades, because it requires an extremely low gradient of knowledge from bottom to top. Frankly, I don’t think Greece has a chance (without outside intervention, anyway). It seems like the vast majority of people are still trying to get back to the good old days, or think this is just a temporary blip that will resolve on its own, or that the mainstream unions and the government have any relevance at all… sound familiar?

        1. Elise Mattu

          The American cololists were the participants in a rather extraordinary situation. They were living inside a matrix of abundant open spaces, clean air, clean water, more than abundant game to eat. Although many colonists were not “educated” in terms of how we 21st Century types view “education,” neither were they dumbed down.
          They were living inside an autonomous zone. (For more about an autonomous zone, google author “Hakim Bey”.) There was no Centralized Banking forces to shut the Colonial society down. After all, there isn’t much of a way for Centralized Bankers to shut you down if a musket and a few hours time will let you bring home dinner for your family.
          The average Colonist of those times was living in a way that if he had access to the pamplets and speakers of Town Square, or the Town Hall meetings, he was immediately educated as to the economic paradigm the colonists faced as long as they remained under Birtain’s yoke, as opposed to how things would work if that yoke were broken.
          Many of us do not even understand the gains that these Colonists brought to society as Britain’s yoke was repealed. For instance, after the success of the American forces against British forces, a law was established in the United States that no one could utilize a lawyer in a court room. That each indiviual had to represent themselves. (Attorneys soon saw that law be relegated to the dust bin of history.)
          In many cases, within the decade, the peeople ended up suffering under unfair policies. If you look at the Whiskey Rebellion, you realize that although Americans no longer had the British tea surcharges to worry about there were instead new taxes. And now these taxes were brought about by people in the city who thought it fine to tax the rural dwellers who were making moonshine.

      1. RanDomino

        No. The closest so far is probably the Spanish Revolution of 1936, which was the result of decades of organization and education at the most plebeian level; when the moment came, the general population spontaneously carried it out as if by a force of nature… but then they hadn’t done a very good job of thinking about afterward; so the pre-existing organizations and leaders were able to reassert themselves. There is a good chance that the CNT was actually just a trade union whose ‘competitive advantage’ to attract workers was its radical anticapitalist/antistate rhetoric- without actually being either. Some of the most injurious betrayals came at the hands of CNT leaders, such as the decision to join the government, and telling the workers to surrender to the government and Stalinists in May 1937- which, bewildered, they did.

        1. Lambert Strether Post author

          That’s what I thought. Oh well:

          There are many cumbersome ways to kill a man.
          You can make him carry a plank of wood
          to the top of a hill and nail him to it.
          To do this properly you require a crowd of people
          wearing sandals, a cock that crows, a cloak
          to dissect, a sponge, some vinegar and one
          man to hammer the nails home.

          Or you can take a length of steel,
          shaped and chased in a traditional way,
          and attempt to pierce the metal cage he wears.
          But for this you need white horses,
          English trees, men with bows and arrows,
          at least two flags, a prince, and a
          castle to hold your banquet in.

          Dispensing with nobility, you may, if the wind
          allows, blow gas at him. But then you need
          a mile of mud sliced through with ditches,
          not to mention black boots, bomb craters,
          more mud, a plague of rats, a dozen songs
          and some round hats made of steel.

          In an age of aeroplanes, you may fly
          miles above your victim and dispose of him by
          pressing one small switch. All you then
          require is an ocean to separate you, two
          systems of government, a nation’s scientists,
          several factories, a psychopath and
          land that no-one needs for several years.

          These are, as I began, cumbersome ways to kill a man.
          Simpler, direct, and much more neat is to see
          that he is living somewhere in the middle
          of the twentieth century, and leave him there.

          1. RanDomino

            How dare I take the most inspiring moment in modern history as a jump-off point while acknowledging mistakes and proposing corrections. Terrible.

          2. Lambert Strether Post author

            @RD Well, how you did is for you to answer. “[W]hich, bewildered, they did” ties in rather well with the underlined portion of the poem. I’m not saying that the events in Catalonia weren’t inspiring, or cannot be learned from, only that the history of mass movements in the 20th C is a tragic one.

  2. Nathanael

    The choices are left-wing revolution or right-wing coup. We say this coming. Hint: pick left-wing. Lenin is preferable to Hitler or Franco. And Stalin is still avoidable.

    1. brian t

      I don’t think the usual “left” / “right” dichotomy is all that helpful here. Were the Nazis “left” or “right”? They were Socialists, so you could call them “left”, but they were Fascists, so you could call them “right”. In other words, they were “left” in economic terms but “right” in socio-political terms.

      If there’s a coup in Greece, it could be just as complex counter-intuitive. Say the new boss is a “Leftist” who nationalises industry … what industry?

      1. Sufferin' Succotash

        Interesting how Hitler goes on fooling people 60+ years later. The National Socialist German Workers Party(NSDAP or Nazis for short)dropped its socialist program around 1930 in order to pick up middle-class and business support, which it did. It even became illegal later on even to mention the party’s original Twenty-Five Points which included some leftish economic proposals. And yet there are some credulous souls even today who insist that somehow the Nazis were “socialist”. The people who ran IG Farben back in the day would have been highly amused.

        1. Timothy Y. Fong

          Exactly. That’s why Hitler had to purge the leader of the SA, Ernst Rohm. Rohm took the “Socialist” thing seriously. Hitler’s new buddies in big business didn’t like Rohm, so Hitler had him killed.

          1. RanDomino

            Not just him, but much of the SA at well, which at the time numbered in the millions. Their leaders were arrested and/or killed and they were reorganized. Poor bastards.

            Not that that excuses their quite real xenophobic, violent, and authoritarian aspects; but to get a full understanding of Fascism requires awareness of it relationship to Syndicalism- a word and idea which has been almost entirely thrown down the memory hole. Consider Peron- beloved by the Communists!

      2. Maafer

        Nazis were not Socialist. Your comment invites the observation that the specific focus on “finance capital” as the source of all evil has a history – it’s long been a mark of right-wing populism.

        Nazis abstracted the usurious or banking capital from the modern economic system because it is to the bankers to whom the petty bourgeois owed his debts; and, as is well known, it is precisely in this sphere that the Jewish bourgeoisie has long occupied an important position. Bowing down before capitalism as a whole, the petty bourgeois declares war against the banker who squeezes him financially. Eliminating the Jew would surely solve many problems.

    2. Ned Ludd

      Chomsky has a perspective on Lenin that I had not heard before:

      Lenin was a right-wing deviation of the socialist movement, and he was so regarded, he was regarded as that by the Marxists, by the mainstream Marxists. We’ve forgotten who the mainstream Marxists were because they lost, and you only remember the guys who won.

      It is interesting that Lenin used the same insults as modern-day liberals to marginalize people on his left, e.g. calling Anton Pannekoek an “infantile leftist”. Wikipedia has a summary of some of Pannekoek’s views on Lenin and the Bolsheviks.

      [Pannekoek’s] later analysis of the failure of the Russian revolution was that after Lenin and the Bolsheviks came to power, they crippled the soviets. Instead of workers’ councils, the Bolsheviks had instituted the rule of their party, which in Pannekoek’s view is what led to the institution of the Bolsheviks as a new ruling class.

      1. Ray Duray

        Re: “Chomsky has a perspective on Lenin that I had not heard before”

        Having been a part of the Occupy movement desirous of radical change, http://www.occupybendor.org/
        I take a keen interest in such discussions.

        One thing Chomsky seems to have air-brushed out of his narrative is that in the Russian Civil War, the Bolsheviks were fighting militarily on 26 separate fronts from 1917 to 1922. To think that Chomsky’s romanticized Left Communist worker’s soviets could have prevailed against the imperialistic forces ranged against the Red Army is naive in the extreme. http://en.wikipedia.org/wiki/Russian_Civil_War

        1. Goin' South

          And two of the “fronts” were against the workers/sailors of Kronstadt and against the Anarchist Maknovists in the Ukraine. This was after both those groups had fought with the Bolsheviks. But both groups insisted in keeping their soviets.

          Moreover, against whom did the Spanish Anarchists have to fight once they had actually succeeded in their revolution/counter-coup in Catalonia? The lovely Stalinists, who disarmed then killed both them and the Trotskyist POUM.

          1. RanDomino

            Here, let me fill in for him- “The Kronstadt traitors were part of a Western plot! Their demands were all bourgeois wartime luxuries (like “freedom of the press” and “allowance for hanidcraft production so long as it does not use wage labor”)! Makhno was working with the Whites! You can’t carry on a war without dictatorial centralization! OVER NINE THOUSAND FRONTS!!!!11″

      2. digi_owl

        I get the sense that Chomsky meant authoritarianism when he said right-wing. This in that Lenin and crew were all too willing to dictate from on high, or even take direct control over local issues. And Stalin went even further. Hell, Lenin specifically warned against Stalin on his deathbed.

        1. different clue

          Really? Lenin warned against Stalin on his deathbed?
          Well! . . . isn’t that special. Given that Lenin helped create the system within which Stalin rose to power, Lenin deserves some thanks for Stalin.

          1. RanDomino

            Hell, Trotsky’s deeds during his own life foreshadow what kind of leader he would have been. Remember, a Kulak is anyone who has enough to eat!

          2. different clue

            (to Ran Domino actually . . . )

            Yes, I remember reading something Solzhenytzin wrote about Trotsky; to the effect that since Trotsky was more intellectually clever than Stalin, Trotsky would have invented even more categories of people to exterminate and would have engineered a bigger death-toll within the Soviet Union.

          3. Maafer

            Solzhenitsyn is garbage. His anti-communist thesis boils down to this: many prominent communists have been Jewish, therefore Communism is a crypto-jewish conspiracy that has kidnapped Russia. It is unbelievable that the West elevated Solzhenitsyn as some sort of intellectual and novelist, when in fact he little more than an anti-Semite. All the Russian Right is anti-Semitic because they all say “Communism is Jewish” and they believe in “Judeo-Bolshevism.”

            Solzhenitsyn was also a fascist. He never met a fascist he did not love. He had particular love for Franco of Spain, AS’ hero. He supported all postwar radical rightwing fascist death squad type regimes also.

            He’s also was a liar. Russians don’t hate Jews due to “Judeo-Bolshevism.” The anti-Communist Russian Right does, sure, especially Czarists/Fascists like Solzhenitsyn, but those are a minority. Most Russians don’t hate Communism and don’t hate the USSR. Russians are anti-Semites, it’s true, but they’ve always been that way and Communism has nothing to do with it.

        2. Maafer

          All of the surviving members of the Lenin-era, except Stalin and Trotsky, were tried. By the end of the final trial “Stalin had arrested and executed almost every important living Bolshevik from the Revolution. Of 1,966 delegates to the party congress in 1934, 1,108 were arrested. Of 139 members of the Central Committee, 98 were arrested. Three out of five Soviet marshals (Alexander Ilyich Yegorov, Vasily Blyukher, Tukhachevsky) and several thousands of the Red Army officers were arrested or shot. The key defendant, Leon Trotsky, was living in exile abroad, but he still did not survive Stalin’s desire to have him dead and was assassinated by a Soviet agent in Mexico in 1940.”

          If Stalinism is inevitablely the consequence of Leninism, then why did Stalin need to kill all of the Old-Bolcheviks?

          People who risk their lives in a civil war tend to be less likely to be yes-men careerist-opportunists.

  3. Middle Seaman

    Neoliberalism and the replacement of elected government by financial forces has turned Greece into a basket case. They also ravage Britain and does tremendous damage to the U.S. society.

    Greece can recover only when Spain, Britain and the US will finally say no to the financial mafia that controls us. It isn’t likely to happen soon.

    1. RepubAnon

      The lesson of history is that if you want to take over a country, you first make it ungovernable. After that, the population quickly grows so tired of the violence and anarchy that a ruthless charismatic leader promising a return to stability and order can more easily take over by promising to get rid of whatever scapegoats have been blamed for the chaos.

      Rise of Stalin – rise of Hitler – now Greece. It’s an old story.

      1. Nathanael

        OK, you get it!

        My point is that if you get a “left-wing” revolution with “left-wing” policies, a la Napoleon — and I’m using French Revolutionary terminology, because they invented “left wing” and right wing” — then the average people see some *improvement* in their lives after the revolution. The bureaucratic reforms were real. The same was true when Lenin replaced the Tsars; the bureaucratic reforms were real and life actually was slightly better. I would say that the same was true of Emperor Augustus’s takeover of Rome.

        If you get someone like Franco, everything just gets worse for everyone except the elite.

        1. Nathanael

          I would much rather avoid a revolution of any sort.

          However, the people in power are making it very difficult to have the sort of incremental reform which is necessary to avoid revolution. Instead, they are making the existing institutions less and less functional.

        2. Nathanael

          I also want to be very clear on why revolution happens: people need a government which *works*, which provides the basic needs of the people (food, work, entertainment), the duty of government since the times of the Pharoahs.

          Governments which are not providing these basics lose their legitimacy as governments in the eyes of the people and are very easy to overthrow; any charismatic warlord can do it. What is harder is replacing them with something which *does* work.

    2. RepubAnon

      Shorter version: the powers that be know that austerity is destroying Greece – they planned it that way. Our new Galtian World Order requires the destruction of the middle class across the world, and replacing it with just enough workers to serve the needs of the Galtian Overloard (aka “Owner”) class.

      The other part of the plan is to get rid of what Malthus called the “excess population” – thus freeing up more resources for the Owner class. Hey, there’s only so much potable water in the world – we can’t have both a middle class and enough water for a prize-winning vineyard, too.

  4. different clue

    I thought I heard somewhere that SYRIZA wants to keep Greece within the Euro currency and thinks that is possible on some terms other than austerification. But if the Master Lenders insist on austerification as the price of getting the loans which let Greece fabricate the appearance of non-default, then what different terms could SYRIZA possibly get for keeping Greece in the Euro?

    What does Golden Dawn think about Greece staying in the Euro as against going back to the Drachma? If Golden Dawn supports Greece going back to the Drachma, then Golden Dawn will be the party Greece turns to IFF a voting majority of Greeks finally decide that the pain of keeping up appearances is not worth the alleged benefits of remaining in the Euro.

    1. peaceful

      Greeks are currently numb. If anything they are still pro euro because their favorite brands of smoke still cost about 3-4 euro a pack-once they enter the drachma those cigarettes will (at least temporarily) become unaffordable.

    2. YesMaybe

      Well, I don’t know Golden Dawn’s position on the euro, but I have some notion regarding SYRIZA. As you say, Tsipras’s party was taking a pro-euro anti-memorandum position. Tsipras said in interviews what he would do is basically convince Merkel she is wrong. I think it can best be described as fantasy or (more plausibly) bullshit. So, with that as our evidence, let’s ask what we can expect in the future from SYRIZA.

      I conclude that Tsipras is just carrying out the typical politician approach of promising the voters they can have their cake and eat it too. He knows the population is pro-euro and anti-memorandum, so he promises he can deliver on them both, even though that’s clearly false. So I have little doubt that when/if greek sentiment turns anti-euro he’ll be very quick to become anti-euro too. Whether he’ll do it early enough to get a big chunk of votes, whether Golden Dawn will continue to grow, etc. I have no idea. But I’m very confident that SYRIZA will stick to its ‘facts and logic be damned’ opportunism. Of course, I don’t meen to suggest ND, PASOK, GD, etc. are better (I was actually hoping SYRIZA would win the last election, even though they’re full of shit).

      1. different clue

        Well . . . if the Greek people want to have their cake both ways and eat it too, then what else are Greek officeseekers supposed to do if they want to win the offices they seek?

        So perhaps a few million Greek people have a few million decisions to make.

        1. Bert_S

          They do. Opinion polls were taken back during Bailout I and a large majority were in favor of exiting the EU. A second question was asked – do you want to give up the euro? The overwhelming majority said NO!

      2. looselyhuman

        I would like to see a cabal of MMTers (a la Hayek and the Chicago Boys in Chile – but good guys this time) go in and offer to take over economic policy for SYRIZA. Dump the Euro and see what can be done with an unleashed sovereign Drachma.

        In any case, they would be starting from deep within a pit, so it might not turn out as a shining example of MMT success…

        1. Bert_S

          They already did MMT to Drachma I, Lira I, Punt I, Peso I and whatever that old portuguese money was called.

          I don’t think the outcome is a question in the minds of the people that already did Version I.

  5. Jesse

    Anyone know what the public sentiment is in Greece regarding leaving the Eurozone? Last I’d read (about a year ago), it was pro-Euro. Are people starting to think this is impossible?

    Also, I’m continually amazed when I read that creditor nations are now “easing up” and allowing more time for austerity reforms to take place. That’s a little like saying I’m only going to drive 35 MPH east instead of 65 when, in reality, I need to be driving west.

  6. Maju

    ““They expect the solution from the left, from SYRIZA.” OK, and? Readers?”

    Not sure what you want us to say, Yves. There were elections just months ago and not enough voters supported SYRIZA. These elections have caused a standoff that:

    1. Gives the institutionalist bloc (ND-PASOK-DIMAR) some extra time (one year, two, up to four if things go smooth – but they won’t).

    2. Gives SYRIZA (a weak coalition until recently) time to build up forces and possibly become even more popular through wise exercise of the role of main opposition.

    3. Gives the fascists and their supporters in the “democratic” parties in power time to build up forces as potential replacement of the democratic facade.

    4. Gives the revolutionary forces either within SYRIZA (KOE for example) or outside it (Anarchists, etc.) time to organize even further within a society that is extremely unhappy and will try to force the hand of the legal system (revolutionary takeover from below) at any opportunity.

    The big question is how long it will take for Athens to burn again? And if such “burning” will produce some sort of revolutionary government and how. I don’t think that the actual government can hold to power for long but for how long exactly remains open.

    A big growing danger is fascism, which is growing bolder by days, with almost full support and tolerance from the authorities who see them as their shock squads and potential replacement.

  7. donna

    ok in side europe out side europe GR have to change AND I AM SURE WILL DO ..don’t forget CULTURE start from here Gr.
    they will show the world what’s mean human force and logice..(every new start is very difficult)..dont’ worry GREEK people will survive ..and wolk in the old street (philosophy) SOPHOCLEO.SOCRATE. the charachter of this people is actractive
    now is difficult … but NEED change …
    thank you

  8. peaceful

    Overall Greece is confused, even Samaras knows the current tack leads to nowhere. Tsipras is obviously not strong/smart enough to lead so we wait. Wait until what?
    Until Spain crumbles…

  9. Nick

    “Good — bad — I’m the guy with the gun.” -Ash

    Politics has been strangled by lawlessness and incorporated double standards.

    When economic priorities usurp the rule of law, thinking “government” is the solution to anything other than pillaging will only make you a target for violent oppression in addition to the current fiscal.

    Where is the [place] Holder Justice dept? Chasing hippies on the West Coast? Where is that bastion of perverted justice??

    WHAT HAS HE DONE — AT ALL — WHATSOEVER IN THIS TERM???

  10. The Dork of Cork

    It seems to be working so……this market state.

    For the market state to work the nation state must not work.

    Capish ?

    This is a question of transfering real resourses (oil) to the core while sustaining demand for the cores products to the very last BMW.
    If the periphery went back to national currencies their domestic demand would increase and external demand for the cores products would crash , thus bleeding the cores corportist heart.

    And at least in the Irish case society began to break down during the credit inflation , not during the deflation which has merely exposing the many contradictions of this dark Euro experiment.

    All roads lead to the city of course – in particular the Big Bang of 86 which forced goverments to service this mass credit note production rather then the commons.
    Germany is as much a victim of this con job as any other nation – its just that many German plebs don’t know it yet as they are being successfully propogandized.

    The Euro is spawn of the city.
    http://www.youtube.com/watch?v=e-pliu-57CE

  11. Brooklin Bridge

    The US will utterly cripple any real movement to the left, so that leaves one direction. It will be as it ever was as usual.

  12. wbgonne

    ““They expect the solution from the left, from SYRIZA.” OK, and? Readers?”

    I’ll take a stab. The Greek People are still to frightened to exit the EZ. That’s why SYRIZA. SYRIZA’s plan, it seems, is to sit and wait while Greece unravels (what other choice does it have?) and the Greek People decide that going with SYRIZA and abandoning the EZ is less horrible than the status quo. Once that happens, SYRIZA should figure a way to exit the EZ and abandon the EURO that will be as painless as possible. SYRIZA may have some leverage in that a disorderly withdrawal likely terrifies the Euorcrats. Assuming Greece successfully withdraws from the EZ and re-adopts the Drachma, SYRIZA and Greece must move ahead with an economic system that is not dominated and therefore corrupted by financialization. IOW, Greece must develop a sustainable economy that works for the Greek People. That is how things will go if they go well. Of course, there are lots of less benign outcomes possible. SYRIZA’s greatest challenge is ensuring that it rather than GD is the greater political beneficiary as the Greece unravels. The Greek People remain too frightened to quit the EZ: SYRIZA must make that choice palatable for the Greek People and must do so by providing a suitable alternative to the current financial plutocracy. Then SYRIZA rather than GD will rise, SYRIZA can call early elections, presumably win, then negotiate safe passage out of the EZ.

    1. RanDomino

      I’m pretty sure SYRIZA says they want to stop austerity AND keep the Euro. The reason that they don’t seem to have much urgency may be a matter of giving their political opposition enough rope to hang themselves, or it might hide that they are desperately hoping an answer appears that lets them do both.

  13. The Dork of Cork

    We have the complete takeover of all offical discourse by cromwellian like forces withen all the periphery.

    The Irish central bank now speaks for Ireland – Sweet jesus

    Refer to
    http://www.irisheconomy.ie/

    A Brave Speech from the Irish Central Bank – The Missing Paragraph
    By Gregory Connor

    “The speech makes clear that the damaging nexus of the former Fianna Fail government, linking the politically connected property development industry to the banking industry and an overly compliant bank regulator, is no longer in place. The Irish Central Bank is now able and willing to stand up to the industry that it regulates in order to protect the public interest, and it is supported in this stance by the ruling coalition. This is an important positive outcome.”

    what can one say ?

    The Irish central banks role is to protect its little sisters – full stop.
    Fianna Fail & the Quinns of this world were and are orcs but they did not produce and or at least sanction the credit note production.
    That process goes much deeper into the economic castle system.

    The entire focus of these goverments is to collect these debts as if they were real physical items.
    The idea of nation state economics , of maximising real productive capacity with the available resourses is not up for discusion until these fradulent credit note debts are collected.
    This is the market state in action – a full privatisation of the money power.

    A true state would respond as Steve from virgina would suggest.

    Credit money expansion (Banks) replaces a great debt with another, greater debt. There is never a net reduction in the debt, only a perpetual increase.
    (we are reducing our debt by exporting our debt / symbolic wealth via goods export elsewhere destroying internal commerce)

    Treasury money expansion is repudiation of debts => repudiation of (pre-existing) money, institutionalized default (expansion includes purposeful inflation).

    Finance offers fiat debt then demands repayment in circulating currency (gold clause effect). Fiat currency offered by the government to retire fiat debt: both the debt and the currency are extinguished at once.

    The creditor says, “You owe us, you must pay with circulating money!”

    The debtor says, “There is no circulating money, the creditors refuse to lend …”

    The creditor says, “We will seize your property instead and destroy your economy!”

    The government (which is also a debtor) says:

    – “We will create money without borrowing and repay the loans as they come due. We can do this because we are the government, our money is paid to our army.”

    – “The loans are fiat — they were created by the lender with the stroke on a keyboard, they were not made from circulating currency. To act as if they were is a crime, a false claim. The lenders will be repaid by a stroke of the keyboard, in the same form as the debts were issued. If you or other lenders touch our property or our citizens we will throw you into prison and decide later whether to feed you or not.”

    – “Because lenders have impoverished our country with endless false claims we will punish you severely whenever we can get our hands on you. You are our enemy and we will destroy you if we can, because you have sought to destroy us!”

    Dork – From a physical economy perspective the debt contracts produced during the credit hyperinflation phase are of no substance.
    The contracts should be declared null and void , the physical property given to the mortgage holder and forget about it – and then try to move on and create some real domestic wealth with what little resourses we have remaining.
    PS
    The Irish central bank is protraying rent collection as a deeply patriotic act.
    Unbelivable.

    The spin in Ireland was that Greece is different as it was a goverment debt rather then bank credit problem…..but the credit figures published by the Greece central bank every month or so point to a credit hyperinflation now contracting also.
    This entropy can only be stopped by the production of Fiat by the goverment and not the banks.

    1. JEHR

      I find it appalling that nations and people can stand by and watch Greece become pauperized and Syria commit genocide on its own people. We are a poor lot, we human beings! Must we wait until all are in austerity to act?

      All politicians seem to be bought by banks or just plain stupid.

      It is a sad, sad world we have created for ourselves.

    2. Susan the other

      I thought we went to war in the middle east to keep the price of oil from inflating and slowing down our economy. Now I see it is just the opposite. We are now determined to control oil to keep it from crashing. Already back in 2002 at the beginning of the war – Bernanke was explaining in his now famous helicopter speech how QE was going to work – just before all that mysterious credit was given to everyone and their dog. At that time he said it would be a nice stabilizing effect if along with the Fed’s (Treasury’s) capacity to do QE if the fiscal authorities would cooperate. They didn’t. Instead we got our own Golden Dawn tea party. A truly befuddled crowd because how do you out fascist the fascists? When they’ve got all the fiat? The only way to do it is to take their usurious fiat away.

      Greece is being asked, now politely!, to pay back what can only be described as odious debt. They should not be asked nor expected to pay this debt back. And Costas’ comments about the private Greek bank debt which was written off which then made the public Greek banks more indebted lost me. All according to British Law? Lost me. And who exactly are Greece’s international debtors these days? Vulture funds? But none of this really matters. We are all Greece now.

      But Costas did say the only thing that matters: Growth is a myth, a neoliberal myth. I do believe this is a hard fact. There will be very little growth in the coming decades, if any. So for creditors who pretend they didn’t see this coming – when Ben Bernanke was giving speeches about it a decade ago, etc. – well… They are going to go under either way. Either by cancelling the debt or canelling the world. I think Greece is going to be OK. Merkel proves it.

      1. Nathanael

        Read the famous Deutsche Bank report. Left on its own, the price of oil is going to whipsaw, up-down-up-down.

        Military interventions actually won’t change this at all, but I think they are best understood as (futile) attempts to *stabilize* the price of oil.

    3. Maafer

      This is all very nice, but it assumes that the state is an independent arbiter instead of a body that carries out institutional functions for the dominant class.

      The proof is “in the pudding.” Can you name a “Democracy” that is acting right now in the interests of its majority?

      1. different clue

        Ummm. . . Iceland? I don’t know that, I merely hope that based on the precious little I read and hear.

        1. Mafer

          Iceland by referendum told the British Banks to take a hike. The democratically elected government in Iceland at the time was in favor of paying the banks and ran television commercials predicting doom if the banks were not paid.

          Lesson: Direct Democracy is effective. Representative Democracy is sold to the highest bidder.

      2. Nathanael

        Accept that the state is an institution which works for the dominant class.

        This has worked out OK for most of history. As long as the dominant class is well-educated, in touch with reality, and what their *duties* are as the dominant class — what it takes to keep the proletariat, and everyone else, happy — this works out fine.

        Right now, we have a dominant class which is suffering from clinically diagnosable delusions, composed of people with dangerous personality problems. Therefore it’s all coming apart at the seams. This is a very bad situation.

  14. The Dork of Cork

    Again when Cuba was cut off from Soviet capital (energy) flows it did not stop dead for lack of token money.

    How absurd !!!!!

    Another example of whats really happening in Spain.
    A energy crisis yet these units must make a profit , which means more leakages of domestic demand……

    es.wikipedia.org/wiki/Tranvía_de_Vélez-Málaga

    “Suspension of service since June 3, 2012 – the tram has stopped working due to lack of budget for maintenance”

    which means they cannot find the tokens for LABOUR – not energy , they are force feeding us oil and the medecine is not good for us , its good for them.

    1. Lambert Strether Post author

      And if SYRIZIA really is taking the passive approach described above, waiting for the game to fall into their hands, that’s not going to work. You’ve got GD setting up welfare institutions, handling police functions, and now starting to draw the line between who gets to stay in the country and who is to be thrown out? That sounds a lot like parallel sovereignty to me, and that’s a strategy that isn’t limited to the good guys…

      Of course, from the standpoint of Germany and France, different language, different alphabet, peripheral locaiton… They no doubt think the problem will remain localized and they could be right.

      1. Susan the other

        If there can be such a thing as parallel sovereignty, can’t there also be multiple sovereignty? Local currencies. They are legal in this country.

        1. Nathanael

          Someone very wise who I know said that he thought the US people would survive the current crisis because of the strength and resiliency of local governments and local institutions in the US.

          The entire federal government could go down, entire state governments could go down, and he figured most of the slack would be picked up by the locals fairly quickly. Well — in some regions! It is important to move to an area where the local government is competent and in touch with the people!

      2. wbgonne

        That is so. SYRIZA is playing a dangerous game. As conditions deteriorate the Greek People will become more and more desperate for certitude and action. And anger and hate will rise. The perfect conditions for the rise of a fascist state. SYRIZA must aggressively promote its alternative to EZ plutocracy to convince the Greek People there is a viable alternative. While the Left cannot compete with GD on anger, certitude and action, there is a window in which the Greek People will be receptive to less drastic policies. Once the window closes, however, the SYRIZA may find itself locked out. SYRIZA must act quickly to establish its post-EZ environment as acceptable with the Greek People. The instant that occurs, SYRIZA must call for elections.

        1. RanDomino

          Not “promote” or “convince” but actually implement. That’s why Golden Dawn is winning- they show by example. So that’s the best way to stop them.

        2. Nathanael

          “While the Left cannot compete with GD on anger, certitude and action,”
          They could (reference France in 1789). They have not done so, which is a mistake.

          It is an understandable mistake, because the proto-fascists who are currently in power will consistently use brutal and violent methods against left-wingers while letting right-wingers get away with the same, and worse, activities as the left-wingers. This makes it harder for left-wingers to get stuff done.

          “there is a window in which the Greek People will be receptive to less drastic policies. Once the window closes, however, the SYRIZA may find itself locked out.”
          By inches. Or it could be another Spanish Civil War.

      3. Maafer

        Weimar Republic Redux. Another foreign imposed economic crisis and the Socialdemocrats (this time Syriza) say that fascism must be defeated peacefully with ideas. Then later they cry for help from the state (none will be forthcoming).

        People want to see action in these circumstances. Strength impresses, not idle talk. In the eyes of the rich, supporting Fascism is like the going to the dentist: unpleasant, but necessary.

        1. Nathanael

          Not a fair assessment of the behavior of the Social Democrats in Weimar, who actually did attempt to act, but were repeatedly suppressed (while the Nazis were allowed to run wild).

  15. Timothy Gawne

    Certainly this is true – if the main political parties offer nothing but poverty and oppression what else are the Greek people to do? Don’t blame the average Greek, blame the politicians, banks and lying economists who brought them to this state.

    If I may though, I do think that many posts are missing the point about “Golden Dawn.” The workers in any country have a vested interest in the rate of immigration not being so high as to drive down wages. They want the border controlled, the same as you don’t want strangers wandering into your house and helping themselves without limit (check out Samuel Gompers and Cesar Chavez). The rich, however, very much DO want open borders, because it creates an overwhelming downwards pressure on wages – and no Virginia, even unions can’t fight the law of supply and demand (there is ZERO record of unions making progress when there are 100 people competing for each job. Unions can’t make water flow uphill either).

    But saying that we are going to import an excessive number of foreign nationals in order to drive workers into poverty doesn’t sound very good, so the rich gussie up their vile policy with pretty words like ‘diversity’ and ‘multiculturalism’, and they slander any opponent as a racist. They will also muddy the water by talking about the character of the immigrants themselves, when of course the real issue is the rate at which foreign nationals are allowed to immigrate.

    In the time of FDR etc., liberals and progressives understood this and were unashamed of moderating the pace of immigration of foreign nationals. Now most ‘liberals’ have either sold out or become useful idiots. If the only party offering to defend the average worker from this sort of abuse is a bunch of Nazis, well, we are going to push people into the arms of the Nazis, aren’t we? Again, I don’t blame the Greeks, I blame you/us.

    Disagree if you will, but please don’t waste our time by saying that I am ‘scapegoating immigrants.’ The historical record is overwhelming: when the rich force population growth, either via importing excessive numbers of foreign nationals or propaganda encouraging large families, the result is ALWAYS poverty for the many and riches for the few. Just one example: recently in Singapore the oligarchs rapidly increased immigration. Immediately wages fell and rents increased. This always happens, and if we continue to deny the obvious, and extremist Nazis/Stalinists fill the gap, it will be we who are responsible.

    1. Doug Terpstra

      A very perceptive and thoughtful comment, Timothy. Immigration is the mother of all divide-and-conquer coliseum games, played to the hilt … most shrewdly by Obama, with more circus than bread.

      1. Nathanael

        I have concluded after studying history that controlling immigration is, essentially, impossible. It is therefore a fool’s errand. (It may be possible in extremely limited circumstances in small locations with natural borders such as Singapore.)

        The correct response is, as said below, something more like the IWW.

    2. Synopticist

      This is very true. Also, remember that European states, unlike the US, aren’t countries of immigrants. The “we were all immigrants once” arguament has no traction.
      Secondly, they tend to have more generous welfare systems, which mass immigration can seem to threaten to swamp. The percieved legitimacy of the welfare state has been badly damaged here in the UK by stories (often, but not always, wildly exaggerated) about third world immigrants successfully gaming the welfare system.

    3. RanDomino

      That is true, if the system is, and is assumed to remain, capitalist. Thus the IWW, for example, was one of the only unions to organize immigrants on a large scale; they sought the end of capitalism, and therefore the end of wage labor and rents and the other arguments against immigrants. Then immigration just means you get to have more neighbors!

    4. Me

      To an extent, yes, we shouldn’t entirely blame the Greeks. We should blame their politicans, and yadda yadda. I personally do blame voters a great deal though, especially here in this country. We might have a corrupted democracy, but other countries have had not only corrupt systems of government, but outright murderous governments and they none the less organized and overthrew them eventually. Say what you want about Chavez, but the forces that brought him to power and that have supported him through the various attacks against him dealt with far worse in pre-Chavez Venezuela. Same with workers in many of the countries in Latin America with new, left-of center governments. Workers still try organizing unions in Colombia despite it being a graveyard for union organizers. We chose these crooks and once it became obvious these bastards could care less about us and once it became obvious that the system was rotten to its core (decades ago now), what did we do? What have we done? Nothing but support the same two parties. We aren’t any less corrupt and have no more of a functioning democracy than Mexico did under decades of PRI leadership. The PRI is back too, yay for them.

      The other center of destruction are the economics departments around the country. Friedman, Hayek, Debreu, Terry Anderson, people like them should be put in their proper place. Right next to Lysenko in the history books. Their ideas benefit corrupt, irrational power structures. No one else.

      1. Maafer

        You may well be from Latin America (such as I am). Even in the left of center countries such as Venezuela, the missions and asistencialist/welfare state are just a drop in bucket given the scale of the problem. Take a drive through Caracas (not Chacao) at 5AM in the morning and you will see the multitude of people who are untouched by these programs.

        Better than nothing, yes. But wholly inadequate.

    5. different clue

      If the immigration restrictionists can learn to make that point without impugning or race-baiting the immigrants themselves, they will be able to spread that legitimate point to more and more people

  16. Peter Dorman

    Fascism does not come to power from the outside; the inside wing of the movement is essential. In Germany the NSDAP could not have established its rule without the support of large parts of the military. In fact, extremists within the military operated openly during the decade before Hitler’s assumption of power, growing in strength.

    What makes GD worrisome is the support they have from the police. OTOH, as far as I know, there hasn’t been the same group of powerful reactionary holdovers in Greece (still angry, say, about 1974) as there was in Germany (angry about 1918). Extremist police in Greece are more peripheral to the overall alignment of power there than extremist military were to Germany during the run up to Hitler.

    That said, a decision by Greek capitalists to welcome GD as a preferable alternative to SYRIZA is not out of the question and could potentially give GD what it needs to exercise power. I think it would be widely resisted, but the outcome would be difficult to predict. Much might depend on whether Europe intervenes.

    I’m sure SYRIZA is considering all of this. It may be one reason they are emphasizing their pro-euro stance, quite apart from its domestic political appeal. Between the demands of their activist base, their potential voters and the center-left, which they might need to forestall a bloodbath, they have quite a juggling act to perform. Good luck to them.

  17. The Dork of Cork

    Timothy is of course right……

    This man was attorney general during the start extreme neo -liberal period in Ireland back in the 80s and helped to set the modern slave arbitrage ball rolling.

    http://www.bbc.co.uk/news/uk-politics-18519395

    These are extreme neo – cromwellian forces that have been very active on the European continent since the 1500s /1600s at least.

    When they built their version of the nation state in Europe post 1648 they seeked to destroy the tribal regions and replace them with sheep.
    They have always been the most dangerous of all forces both when operating out of Venice and the City of London.

    The last doomed battle

    http://www.youtube.com/watch?v=ryozM8twDUI

    They may have won the Battle but that does not mean countries do not need Alan Breck like superheros to teach the bastards a lesson.
    http://www.youtube.com/watch?v=Y35a6qy6BtA

  18. The Dork of Cork

    Notice the constant focus on Competition even if it is mindless -indeed especially when it is mindless.

    The fact that competition destroyed the UKs post war core human & resourse capital base is not a flaw in the system – it is the system.

    These guys want to peserve their RELATIVE wealth and control – they are not interested in the commons wealth.

    Sutherland and his ilk want to crack open societies bones and suck its marrow.
    As a example the scottish highland cattle economy produced far more net wealth then the sheep which replaced it but the wealth could not be concentrated and controled in the same fashion.

    The Euro represents the extreme end of these market state constructs.
    This is a controled structured crisis when seen from this angle.

    These guys are a pox on any society and are very very dangerous.
    http://www.youtube.com/watch?v=j5ptS9q3X8s

    They have come out of their PR shells now (see above) as they think they have won the final battle already which they most probally have.

    The people of Ireland for example are zombies – there has been a dramatic Bonoization of the masses.

    “The world is broken , Bono make it better”

    http://www.youtube.com/watch?v=dXVP1zGc-uc

  19. Me

    Greece is doomed, as is the US and capitalism in the long run. Not just because of the irrational and seld destructive neoliberal capitalism we see here. The environmental and ecological issues we are going to have to deal with are beyond the ability of capitalism to solve. The only question I have is, IF we are able to overcome the forces that got us to the point, who have destroyed working people, social programs the environment, etc, do we hold them accountable for what they have done? If so, how? How do you hold the two parties here accountable for what they have done? I don’t mean simply developing a third or forth party either. How do the bastards in power really pay for the misery they have created. They don’t only have to answer to the Greeks, or Latvians, or the US citizens of today. The same exact policies have completely destroyed poor countries the world over going back decades. The people responsble should be made to pay one way or another. Taking away the vast majority of the “wealth” they never directly earned but none the less managed to take from others would be a good start. We could move on to other punishments from there…

  20. freedomny

    I’m not a wonk. I’m just pratical. And it just feels like this will all end so badly.

    Peace

  21. steve from virginia

    The biggest problem in Greece (along with everywhere else) is the cause of the biggest problem … it is unrecognized.

    The focus is endlessly on money and debt and banks and troikas and the IMF and ‘austerity’ and other money-related nonsense, all of which is a) completely irrelevant, and b) the desired arena of intellectual investigation.

    http://www.economic-undertow.com/2011/06/27/dead-money/

    Nobody wants to accept the truth. Nobody wants to see what is underway as the consequence of the cannibalization of capital by industrial enterprises and the resulting/current shortage.

    The entire European economy has been destroyed by the Continent’s automobiles. Literally trillions of euros have been borrowed from finance in order to waste irretrieveable capital resources. The wasting process has absolutely zero return. In other words, a half-trillion barrels of crude oil has been destroyed and there is less to show for it … than the efforts of the much-maligned feudal lords and clergy of the Middle Ages … who, at least, left behind tourist attractions.

    What have the Europeans have to show for a half-trillion barrels? Some used cars, smog and trillions in unpayable debt!

    The Europeans have been ruined by a toy … nobody can pay for their car by driving it. Nobody can pay for the fuel, nobody can pay for the freeways, nobody can pay for the military needed to steal fuel from others, nobody can pay for the endless ‘vacation ghettos’ that ring the Mediterranean, the political enablers, the bankers, finance and insurance, the hospitals to sew the arms and legs back onto the auto-casualties … none of these can be paid for by driving the car.

    Meanwhile, every action taken by the Establishment in Eurolandia is to defend the cars and the car industry … like the Inquisition defended the prerogatives of the clergy during the Reformation.

    Believe it or not, folks … what we are in the middle of right this second is an energy crisis … THE energy crisis. There is no coming back from this one, folks. It has been hiding behind the cost of credit … but the prices of crude oil speak for themselves. Wasters-comsumers cannot afford the cost of fuel added to the cost of credit. At some near point the amount customers can afford to pay will be less than what it costs to bring new crude to market. At that point the entire world will become Greece … save for those places that become Somalia!

    USA is clinging to the tallest mast on a sinking ship. There is no escape from this! It is intentional capital destruction, when it’s gone it’s gone … for tens-of-millions of years!

    The problems is at the end of everyone’s driveway … it is the dumb human race competing with its pet machines for the means of sustenance for both … it’s to get rid of the goddamned cars … all of them … NOW! It’s them or US.

    Have a nice day.

  22. Jim Davey

    I only bet occasionally … or so I said before doing the mortgage that lead to the complete destruction of my net worth …. BUT if I was a betting man … Greece will rent/lease some naval ports and some airports for the Russian military … or even the Chinese … much like Hong Kong was leased for 100 years …. and the Greeks will bail themselves out …

    Oh please do not tell me Romney will go to war with Russia to stop it. Everything that “s*#$@” and the Wall Street folks understand is unbridled capitalism … unrestrained … unregulated … so for Romney to go to war over a profit based deal between Russia and Greece means Romney and Wall Street denounce everything about capitalism totally and forever more … to do so would require them to admit we are a corporate state based on world domination goals and care nothing about anything but control …. (and the Russians would win that battle in spite of the NeoCONS) …. It actually makes me chuckle when I think of Romney’s spit personality trying to decide between a battle he can’t win militarily without stopping the entire world’s economies …. and eating his own spew). Money and loss statements prevail. Romney eats his own bile at the UN in about 10 days.

    I so hope the Greeks realize they can get rich doing this …. would teach the rest of Europe and yes the Romney’s of the world a lesson … f–k enough people long enough and they fight back. oh btw, if the Greeks do as I suggest … those Greek 1%ers with multimillion dollar yachts and mansions that never paid their share to prevent this … well they will need to pay the Russians berthing fees or face serious deadly consequences …. lol ….. lol ….. hahahhhhahahahahahhahahhahaa ya get what to deserve.

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