{"id":61551,"date":"2015-07-27T12:00:40","date_gmt":"2015-07-27T11:00:40","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=61551"},"modified":"2015-08-03T10:55:26","modified_gmt":"2015-08-03T09:55:26","slug":"capitalism-engineered-dependencies-and-the-eurozone","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2015\/07\/capitalism-engineered-dependencies-and-the-eurozone\/","title":{"rendered":"Capitalism, Engineered Dependencies and the Eurozone"},"content":{"rendered":"

Greece<\/strong><\/p>\n

As fact and metaphor the ongoing crisis in Greece is the vanguard of broad social disintegration across the capitalist West. IMF Director Christine Lagarde is being put forward as the voice of reason calling for writing down Greece\u2019s debt to manageable levels. But her actual public statements have paid deference to German Chancellor Angela Merkel\u2019s suggestion, a slight variation on Barack Obama\u2019s mortgage \u2018rescue\u2019 packages, that maturities be extended but that people be left with debts far greater than they can reasonably pay. As attractive as permanent debt servitude might appear to those demanding it, it is a form of economic extraction, a transfer of economic production from nominal borrowers to banks and bankers.<\/p>\n

Current IMF tactics are being placed in a neo-Cold War frame with the U.S. trying to maintain European political stability on the side of the U.S. against Russia and China. But the broader tendency is toward collective suicide through imperialist revival economics, a global race to replicate Western consumption through increasingly \u2018managed\u2019 capitalism and through renewed competition for resources that led to the catastrophic wars of the twentieth century. The geopolitical frame understates the crudeness of the economic logic that gives banker \/ creditor \u2018workouts\u2019 the appearance of geopolitical machinations. The economic relations in play are \u2018political,\u2019 but they derive from economic ideology that preceded the Cold War by a half-century or more.<\/p>\n

The practical problem with the neo-Cold War frame is that it takes the underlying economic relations as given when they are in fact causal. The euphemistically-called \u2018trade\u2019 agreements being pushed by the \u2018developed\u2019 West grant broad authority over civil governance to multi-national corporations, the point being that the ideology that drives corporate actions is economic, not \u2018political\u2019 in the Western liberal sense of the term. If one wishes to grant a Marxian notion of economics as politics by other means, the new central players have a trans-national, neo-imperialist frame of reference and \u2018competition\u2019 is between economic powers, and not ideologies per se. Angela Merkel\u2019s sense of authoritative entitlement over the Greek people appears to emerge from a prism of bankers \u2018rights,\u2019 not bi-lateral political gamesmanship.<\/p>\n

The European \u2018choice\u2019 was of a monetary union with full understanding, brought into particular relief in hindsight, that it wasn\u2019t a formal political or fiscal union. While there may have been, and most likely were, broader hopes for it, the monetary union created a specific set of economic relationships that are now in play. A monetary union grants political power to a central bank, in this case to the ECB. \u00a0As with the Federal Reserve in the U.S., the ECB represents bankers\u2019 interests as being in the broad public interest when they decidedly aren\u2019t\u2014 they serve the powers-that-be in Europe\u2019s particular configuration of finance capitalism. Until the European periphery comes to terms with what the monetary union really is there is little hope of economic resolution. And the grip that the union has on the periphery is being made binary, either total submission to the whims of the Troika or near-term economic ruin are the choices given.<\/p>\n

The Banality of Capitalism<\/strong><\/p>\n

Through its hegemonic excrescences capitalism is mundane, the ordinary working of a series of complications deemed self-evident. Once cognitive breach interrupts it is clearly, inexorably, lunatic hallucination; the trade of this for that that is activity without engagement, the promise that always remains just a few steps from its object. The Guatemalan peasant whose sustaining plot is rendered untenable by one of three remaining strains of imported industrial American corn enters tenuous-by-design employment in a neo-colonial factory. The \u2018trade,\u2019 as if a choice remained, of the vagaries of sun, rain, pests and crop diseases for occasional income against the permanent threat that someone, somewhere has been rendered incrementally more desperate, and therefore willing to do even more for even less, is resignation to a manufactured fate.<\/p>\n

Organizational complexity is one of the foundational ideas of capitalism. Antique economist Adam Smith\u2019s \u2018division of labor\u2019 is the argument that breaking economic production into its constituent parts and allocating the production of each part to a specialist will increase efficiency. The operational deficiency of this approach is that, in contrast to a single person controlling the production process from start to finish, if any of the constituent parts are missing the entire production process is rendered indeterminate. Efficiency is the exchange of an occasional more for increased social complexity and with it, fragility. The history of global economic relations since the eighteenth century is of integration and breach, wishful thinking followed by dislocations and retrenchment.<\/p>\n

In detached theory there is nothing in-and-of itself politically compromising about increasing social complexity. Social dependencies are a fundamental aspect of being human. One of the earliest tenets of capitalism was the creation of institutions that in theory equilibrated capitalism\u2014 legal protections that limited power imbalances\u2014 contract law, the right of labor to organize, anti-trust powers and civil governance in the civic interest. That these institutions have only tended to make an appearance when the total rejection of capitalism is threatened suggests that very few capitalists take capitalist theory seriously. Increasing economic complexity without civic counterbalances becomes increasingly controlling and with the case of Greece in hand, it perpetuates the consolidation of power until a rupture occurs.<\/p>\n

The case of the ACA (Affordable Care Act), Obamacare, in the U.S. appears to be in the process of illustrating this point. To resolve the most expensive health care system with the worst outcomes in the rich world the choices were to reduce complexity by replacing the extractive layer of health insurance companies with a single-payer health care system or of increasing complexity by formalizing their role in a health insurance pseudo-market with a technocratic overlay of regulations. The fantasy that regulated pseudo-markets would lower costs while increasing care has been met with the rapid consolidation of health insurance companies to reduce competition in order to exert monopoly control over health care \u2018markets.\u2019 The choice now is to once again increase complexity through enacting anti-trust regulations against health insurance monopolies or to leave their new-found power to control \u2018markets\u2019 as is. Economists who didn\u2019t see this coming should reconsider their choice of professions.<\/p>\n

Assuming for the moment a theoretical deepness, Syriza in Greece can be as \u2018socialist\u2019 as it wishes to be as long as the broad reorganization of society that the term implies ends at the foot of an armchair. The Troika, piling on to historical IMF structural adjustment policies, is fine with economic democracy as long as markets are open, public resources and processes are for sale to politically approved bidders, a capitalist banking system has free-rein over the creation and allocation of financial capital, labor is unorganized, desperate and pliable and public policies are dictated by external creditors. Capitalist social engineering, the \u2018integration\u2019 of existing social relations into a \u2018global\u2019 architecture, increases social complexity by reducing it, by replacing local institutions with those that are externally controlled.<\/p>\n

How precisely would the Eurozone, or any other capitalist agglomeration, accommodate a member state that proceeded from fundamentally different principles of social organization, the social purpose and democratic conceptions of economic life? In fact, \u2018the rules\u2019 of economic configuration required to join the European Monetary Union are based on an early twentieth century worldview of national accounts management. This was \/ is the broad frame of European imperial rule before tensions over national debts and colonial resource claims blew Europe apart in the up-to-then most murderous wars in human history. Convergence toward a set of externally determined economic \u2018rules\u2019 precludes the capacity for effective civil governance through establishing a preeminence of economic over civil power.<\/p>\n

Unless history is destiny, a \u2018natural\u2019 limit on social possibility, ideology is the agent that binds complexity to fragility. The immediate counter, that \u2018the world\u2019 is complex, assumes that engineered social complexity is a correct metaphor when it is more accurately anthropomorphic, if not animistic. The related conceit that world is \u2018like\u2019 a machine infers a motivator without which machines are inanimate lumps. Capitalist competition can be alternatively framed as opposition\u2014 only through the fantasy of \u2018system\u2019 are capital and labor, capital and civil governance, capital and society and capital and \u2018the environment\u2019 united in common cause. Where then does this system reside except in the pockets and bank accounts of the wealthy? The Troika and the peoples of the European periphery are on the same side of what?<\/p>\n

Conversely, the \u2018inner\u2019 tendency of capitalism is to try to reduce economic fragility through consolidation of its realm, through increasing control over knowable risks. In the opposite sense that a certain physical conception of the universe is as space, not in space, this ratio of knowable to unknowable factors assumes that the question is asked from \u2018outside,\u2019 from an observer\u2019s, not a participant\u2019s, perspective. However, the relation of agricultural capitalists to Guatemalan peasants through profits and economic displacement is unified\u2014 the reduction of risks from the capitalist\u2019s perspective comes through shifting them to those who lack the power to resist. Greeks once dependent on imported foodstuffs are now dependent on imported foodstuffs and the good functioning of an externally controlled monetary system. German \u2018leadership\u2019 in the Troika now considered punishing approximates the typical behavior of multi-national corporations toward \u2018their\u2019 workforces and reluctant customers.<\/p>\n

Much as U.S. based industrial companies have long used the threat of mass firings to cow labor and reduce pressures for civic accountability, the threat of withdrawing from engineered dependencies\u2014 by metaphor, leaving displaced peasants to quickly recover an indigenous economy after property relations have been reconfigured to preclude the possibility, is the economic assertion of political power. The fact of social dependencies is contorted through capitalist competition into a relation of domination and repression\u2014 people can choose any form of government they wish as long as they show up to work on time, dress accordingly, limit conversations to approved topics and passively accept the dictates of their imperial masters.<\/p>\n

The paradox of Syriza\u2019s ascent as a Party of the left to a leadership position in Greece with a mandate to remain within the European Monetary Union brings the political content of engineered economic dependencies to the fore. Parsing the \u2018good\u2019 of broader economic belonging through the union from the \u2018bad\u2019 of externally imposed austerity assumes that they are divisible when the prior century of history suggests otherwise. The capitalist dogma that supports the monetary union also supports austerity. In addition to being banker \/ creditor boilerplate to assure debt repayment, austerity ties to the capitalist division of a \u2018productive\u2019 private sector from a reliant and unproductive public sector. Austerity is \u2018starve the beast\u2019 dogma of private virtue and public vice. The desire to craft a \u2018kinder, gentler\u2019 capitalism, as Syriza apparently thought it could do, fundamentally misread \/ misunderstood the opposition.<\/p>\n

Now a question for the Greek people, as well as the rest of the capitalist West, is: if you want capitalism, why not embrace austerity? The Keynesian complaint, that in certain circumstances such as that of Greece in the present austerity is economically destructive because it perpetuates under-consumption, leaves intact the productive private \/ extractive public division as if it were descriptively accurate for modern mixed economies. And it facilitates the opportunistic parsing of private production from the social and environmental destruction that it causes. Within a center-periphery frame of Western imperialism, austerity as forced privation through the both engineered dependencies and exclusion through property relations from the means of independent economic production consigns increasing populations to permanent austerity.<\/p>\n

Again, there is no assertion being made that there is a \u2018natural\u2019 limit on the realm of social dependencies. It is the oppositional nature of capitalist \u2018competition\u2019 that renders economic dependencies socially toxic. Whomever has benefitted from the sequential \u2018bailouts\u2019 of Greece, be it Greek, German and \/ or French banks, they no more represent the interests of most of the people of those nations than Citigroup, McDonald\u2019s or Walmart represent the interests of most Americans. And global banks, both as a group and through nominally independent institutions like the IMF, are the central proponents of the creditor economics of austerity. As a \u2018union\u2019 of interests, the EMU is first and foremost a union of financial interests. Through the social grant of the right to create and allocate financial capital banks are where the money is. But the social power that banks wield comes from the public grant, not from the banks and their representatives directly.<\/p>\n

Near-term technological considerations aside, the question that the Greeks and other peoples of the West may wish to ask is why banks and bankers whose livelihoods derive from the public grant to create and allocate money should be allowed to use it to rule the world? The quote from economist Joan Robinson that \u2018The only thing worse than being exploited by capitalism is not <\/em>being exploited by capitalism\u2019 refers to precisely this type of engineered dependency, not to a natural state of the world. Was the intent of the European Union a partnership of equals then Syriza would have been granted a distinctive voice. With its mandate to remain within the union it is but another set of bodies warming the chairs at \u2018negotiation\u2019 tables listening to the dictates of the Troika.<\/p>\n

The pragmatic difficulties of following the democratic mandate from the July 5th<\/sup> referendum derive from complexities that were sold as simplifications. Instead of multiple currencies the EMU would have only one\u2014 a simplification. However, any exit from the currency union will require the rapid constitution \/ reconstitution of a monetary infrastructure now rendered infinitely more complex through the broader project of joining finance capital\u2019s ways of conducting business. A long-term exit plan assumes that Syriza can either stay in, or regain, power when political control has already been acceded to the Troika through economic control. An unplanned exit that allows the engineered complexity of monetary integration to quickly destroy the Greek economy would most likely find desperation leading to restoration of a compliant Greek government in dramatically worsened economic conditions.<\/p>\n

What isn\u2019t being put forward in the present, as best I can determine, is a left vision of possible economic organization either after a well-planned exit from the monetary union has been accomplished or after the broader EMU project has imploded from its own capitalist \/ banker-friendly design. The Western criticism that the European periphery is destined for permanent second-class status grants primacy to the wholly unsustainable political economy of the Western \u2018center\u2019 and to \u2018first-world\u2019 capitalism as a habitable form of social organization. Economic complexity is being used as a tool of social repression leaving either simplification or complexity that serves a social purpose as alternatives.<\/p>\n

______________________________<\/p>\n

Rob Urie<\/em> is an artist and political economist<\/em>.<\/p>\n

Go to Original \u2013 counterpunch.org<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Syriza in Greece can be as \u2018socialist\u2019 as it wishes to be as long as the broad reorganization of society that the term implies ends at the foot of an armchair. The Troika, piling on to historical IMF structural adjustment policies, is fine with economic democracy as long as markets are open, public resources and processes are for sale to politically approved bidders, a capitalist banking system has free-rein over the creation and allocation of financial capital, labor is unorganized, desperate and pliable and public policies are dictated by external creditors.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,51,55],"tags":[],"class_list":["post-61551","post","type-post","status-publish","format-standard","hentry","category-in-focus","category-europe","category-capitalism"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/61551","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=61551"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/61551\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=61551"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=61551"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=61551"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}