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Wednesday, February 24, 2010

Navarro on how to solve the Eurocrisis.

Economist Vicenç Navarro deals
at Rebelión[es] with the difficult economical and political situation of EU under the euro.

He first considers how the implementation of the single coin with its draconian budgetary demands, was meant to damage the popular classes, which are almost invariably those who benefit from public expenditure, perpetuating, in the case of Spain, the inequalities established by the fascist dictatorship.

Then he travels to other EU states such as Letonia (GDP down 25%, unemployment up to 22%) or France (69% against the euro), while despising IMF's and Krugman's suggestions of reduction of salaries (how do you expect people to pay for the cost of life, if they can't already?)

Then it goes to offer a constructive alternative, that I detail here:

1. Creation of a true European federation, really democratic and participative, including a real instance of economic and monetary coordination at EU level, which does not exist now.

2. A EU budget that, as suggested by the "founding fathers", should be at least 7-9% of the GDP.

3. A Central Bank that is dependent of political institutions: European government and parliament.

4. A pan-European Social Pact, producing pan-European workers' statutes with legal weight.

5. A radical change of the criteria of Maastrich and the Stability Pact, emphasizing the Development component and prioritizing economic growth and employment creation.

6. Alter the draconian limits on deficit, allowing for more deficit than just 3% of GDP and for more debt than just 60% of the state's budget.

7. Instruct the Central Bank to have a role in the generation of European bonds that would help states to solve their punctual budgetary crisis in harsh times like these.

8. Do not allow that any state can be brought to the limit of not being able to pay its debt: creating a EU common front against such eventualities.

9. Establish a EU tax that would feed a common fund with purposes such as redistribution policies that stimulate economic growth, employment generation, etc.

My opinion:

However, I'd say this is not enough. This would have worked if implemented in the 90s or early 2000s but now it is already too late: the only solution for EU (and all capitalist regimes throughout the world) is true socialism. European federation? Sure but under a red banner (and of course with a real red policy).

Of course in the meanwhile, we will witness some of this, with a likely devaluation of the euro in order to allow some competition. Getting out of the common coin is not any realistic option (people would continue using, or at least treasuring, the euro while it exists, because it's stronger and would not get devaluated every other day: think Milosevic's Serbia, where salaries used to be named in German marks) and kicking a country out of it is not either (same reasons, plus political tensions).

This context really only allows for one exit: the creation of a European super-state that rules the economy somehow. But liberals (capitalists) don't want that: their whole (misguided) goal was to create a common market without efficient, much less democratic, federal institutions. This is a total nonsense proper of that engender known as Reaganomics (less state, more "market"). No "market" solutions, of the likes of the IMF, are really possible in this context. Blowing up the euro is not an option either (if it ever happens it will cause much more grief and problems than anything else, not just locally but at the whole EU level).

However a social-democrat federal EU as Navarro suggests is totally inviable, first of all because there are not anymore any social-democrats around. Sure there are a lot that call themselves that way but the only thing they do is to bow their heads to the IMF and the liberal policies of Brussels. And they don't have anymore any project of their own. In the past even the right used to be somewhat social-democrat, now it's the opposite and it doesn't look like the minds involved would ever be able to challenge their "market" fetishes, much less the mega-corporations that rule them, in order to achieve a viable Europe for the people.

That is not their goal anymore: they are all too corrupt, too involved with the global capitalism to dare think in terms of Europe.

Hence the only alternative is to break the molds and forge a new Europe of the people. But this, admittedly will not happen in the next few years, so I foresee a steep path of decline and further chaos, not only affecting EU but all Earth (after all EU is a major market and supplier for nearly everybody else). Eventually the European working class will realize their situation, get organized and take over. But it will take some time for the whole process to complete, sadly.


Kepler said...

How much do you think it is going to take? 20 years? 100 years?

Maju, what workers are you talking about? Europe of the XXI century is not Europe of the late XIX century. Most people in Europe are skilled workers and blue collars, not guys using a hammer as main tool and living under inhuman conditions (well, perhaps you see inhuman conditions more broadly than most do).

Also: I know you can't explain your whole vision here, but: could you mention some reference I could read about an alternative system? I have read Marx and at least some fragments of a couple other leftists (Engels, Lenin, a bit Noam)...but still I don't see how things add up and besides, their vision is pretty outdated. It is more or less like them describing the Reino de Dios as Jehova Witnesses do but not saying who is going to pay for it all (not even Engels).

Maju said...

"How much do you think it is going to take? 20 years? 100 years?"

No, a decade or so. I can't really say but I'd bet for the 2016-2021 period. Though around the next year is going to be pretty rough anyhow: it may be what 1905 was for 1917. There's no 1917 without a 1905, you know.

But, well, I can only play seer based on astrology and I have not explored this matter in the last many months.

"Maju, what workers are you talking about? Europe of the XXI century is not Europe of the late XIX century".

Social workers. That's what the game has been about since c. 1968, since Toyotism, the last phase of Capitalism as outlined by good ol' Karl, came into shape. That's what the elites of the USSR missed and that's why they collapsed. Stalinism was designed for Fordism, disciplinary capitalism, but this one was not anymore...

"... well, perhaps you see inhuman conditions more broadly than most do".

Do you know what unemployment rate is there in Spain right now? 20%! And that only counting those actively looking for jobs as reported by the INEM... the figure should be much higher in fact. Latvia is worse, Greece is not much better and in general the EU has very high unemployment rates.

In some countries/regions their anger is kept at bay by welfare policies but Spain has virtually no welfare (and that's surely the case in many other states). What do you think that 20% of families without a single income will do? Sure: narcotraffic and other criminal activities are an option but not for most.

At first they will sit desperate before TV maybe... but eventually, as the untenable situation lingers... they will get more and more radicalized... until the system explodes.

"I know you can't explain your whole vision here, but: could you mention some reference I could read about an alternative system?"

I've read several, maybe many, but I'm not persuaded. As Negri put it: we can't pre-define what workers will create.

If they do. The apocalyptic option is always around the corner, of course. But it's the only alternative to socialism right now.

Maju said...

"I have read Marx and at least some fragments of a couple other leftists (Engels, Lenin, a bit Noam)..."

I'd recommend Negri and in general the Autonomists, which are the eclectic marxist-anarcho-ecologist of the post-Fordist era. You are quite correct, IMO, that the rest are somewhat outdated.

That's more or less my alignment.

"not saying who is going to pay for it all".

Paraphrasing good ol' Buenaventura Durruti: we the workers are who make things happen, we are the ones with the know how, we have created all these buildings, water, electricity and gas networks, all the roads and harbors, we are who grow the food out of the land and the ones who laid down the whole internet and made up each computer and the software that gives it life. We are God in collective form: we need no money, just organization.

So far, as Marx and Negri, would put it, capitalists have monopolized that organization, with impressive but destructive dynamics. But their time has come, as they have reached the limits of what can be done based on mere greed. The struggle for control of production has begun... and we will see it grow more fierce and bloody in the next years.

But eventually there will be an outcome to this struggle and it's crystal clear that The Capital can't win because it has nothing, absolutely nothing to offer anymore: just misery and growing totalitarianism.

So something else will be the result. I have considered all possibilities and nothing that is not democratic socialism (or communism) can work. It's not just the classical class contradictions that Marx spotted so well but it's also the much more determinant environmental contradictions that he failed to see at all.

Of course I have considered eco-fascism and eco-capitalism but, sincerely, apart of a propaganda pretense they just can't work. Ecology must be socialist and democratic. And that's the way to go. The more we delay it, the worse for all.

Maju said...

Maybe check this e-book by Néstor Kohen that I just stumbled upon: Nuestro Marx (large PDF). I really don't know how good is it (just browsed a bit so far) but it's obviously critical of Stalinism, yet Marxist from a Latin American viewpoint from what I've read. Maybe it's the kind of stuff you're asking for.