Greece, Syriza and Conspiracy Theory as Politics

I’ve attracted some anger from Twitter and Facebook followers for my scepticism over Syriza and the mess in Greece. This is an attempt to clarify why I believe the left has been misled by Syriza and the supposed anti-austerity movement, and become increasingly nationalistic in the process.

With yesterday’s referendum (supposedly) rejecting austerity, the long-running Greek tragedy seems to have come to a head. But the events also highlight two longer-running and more worrying tragedies: the seemingly unstoppable rise of European nationalism, and (regular readers will know this is a recurring interest of mine) the intellectual collapse of the political left.

Without some understanding of the economics behind what has happened to Greece, one is left with empty slogans, applied in a childlike fashion. Austerity bad, banks bad, people good, elite bad, Syriza good, Germany bad. Where the reality of the situation comprises a long string of corruption and errors, instead we’re presented with idiotic conspiracy theories: They want to bring down Greek democracy; They want to punish Greeks for electing Syriza. In terms that a 5 year old would appreciate, we have heroes and villains, goodies and baddies.

From the moment of the financial collapse, Greece has been a tricky one for the left to explain, as we tried to find a way to blame capitalism for the disaster. While the crashes in America, Ireland and Spain were largely due to market overreach and a frenzy of property speculation, Greece’s problem has always been the state. Before the financial crash even took place, Greek governments had run up eye-watering levels of debt, which had become freely available because of the decision to allow Greece to join the Euro – a decision that, in hindsight, pretty much everybody accepts was a mistake.

Now the left attempts to blame shadowy ‘neo-liberal’ forces for the creation of the debt: ‘the banks’, ‘the elite’ or ‘the establishment’, implying that ordinary Greeks did not benefit from the spending spree. But ordinary Greeks did benefit, and once the money taps had switched on, they insisted they stayed on. For any political party to attempt to end the fiesta would have been political suicide. The money was spent on creating public sector jobs with little purpose other than to spread wealth downwards, on early retirement and on generous pensions. Furthermore, many ordinary Greeks decided that paying tax was tiresome, so didn’t bother.

Having joined  the Euro, Greece had become a third-world economy pretending to be a modern, European one. Like a teenager winning the lottery, the outcome was never going to be pretty.

None of this was ever secret. Economic commentators would express amazement at the way southern European countries happily trampled the Euro rulebook, and some predicted eventual disaster. So the financial crash came, and as Warren Buffett amusingly told us, when the tide goes out, you find out who is swimming naked.

And so the immense bailouts began. Vast amounts of money were pumped into Greece, and enormous debts were forgiven. So it’s puzzling today that the left should be whining about the need for ‘solidarity’, or the need for something like the Marshall Plan that rebuilt Germany after WWII. Here was solidarity on an unprecedented scale. Taxpayers from rich countries pumping money into a poorer country to keep it from the brink of collapse.

Of course, this money was injected out of self-interest; but then, so was the Marshall Plan, and so is aid to Africa. Collapsed economies threaten instability, and create economic ripples that weaken other economies. But still, the action demonstrated the inherent liberalism of the EU project: wealth was being redistributed from rich to poor on a huge scale.

And naturally, the bailouts and debt write-off came with strings. There would be no point trying to save Greece without its conversion to a more dynamic, self-supporting economy. Greece has almost no exports. Without a massive economic restructure, Greece would simply come back for more, over and over again. So the demands for austerity and economic reform did not come from a position of neo-liberal anti-democratic evil, as so many on the left have convinced themselves.

But still, the depth of the austerity measures was misguided, and prevented economic recovery. Although the left seem to think that they alone have been saying this, in fact many commentators have said this since the start of the bailouts. Given Greece’s economic infantilism, and the prospect that they would be permanently supporting the nation, nobody can blame the EU or IMF for distrusting the ability of the Greek government to take the nation off welfare, or trying to force its hand.

The accusations that the austerity was some kind of punishment, or an attempt at a coup, are beyond ludicrous. The very people demanding austerity were those who lent the country money, and most certainly wanted their money back. So the austerity, however misguided, was not the result of a conspiracy, but dual forces: a pigheaded approach from the lenders, coupled with Greek bureaucracy, corruption and ineptitude.

Ironically, the economic signs were cautiously beginning to improve in 2014. Then politics intervened to destabilise the situation again. Nobody can blame the Greek people for being angry or exhausted, and so the election of Syriza in January was unsurprising. Syriza came to power by peddling an attractive lie: Greece could both reject austerity and stay within the Euro. This could only be possible if the electorate of the Eurozone countries were prepared to subsidise the nation forever. And no electorate would ever do that. The governments of Germany and France had been subsiding Greece despite the will of their electorates, but would eventually be overrun by nationalistic forces if they continued to do so indefinitely.

Greece’s new leaders have behaved like overexcited children, and have burned bridges with the very bodies keeping Greece afloat. The (now ex) Finance Minister Varoufakis built a reputation for sweeping into meetings and giving lectures on economics to some of the world’s top economists. Then finally, with a new deal almost agreed, Greece’s government abrogated their responsibility to make hard decisions, and instead called a referendum.

Yesterday’s vote was unbelievably misguided at multiple levels. It asked ordinary people to answer an incredibly complex economic question; the proposals voted on were no longer on offer anyway; criminally, the effect of the one-week delay on the Greek economy was catastrophic, estimated to have cost Greece €1.2bn: money that the country hardly has to spare, and which must be added on to any new bailout package.

But most of all, the vote repeated Syriza’s core lie. The people were told they could reject austerity while remaining in the Euro. So of course, they did. But regardless of Prime Minister Tsipras’ reassurances, this was essentially a vote on Euro membership. Without understanding what they were doing, the majority of Greek people voted yesterday to leave the Euro. Tsipras, of course, now says he has a strengthened mandate to negotiate, but those days may be over. Syriza has blown the chance to negotiate for the past 5 months, choosing instead to call their lenders ‘Nazis’ and make revolutionary speeches – it’s highly unlikely they can do any better now.

Greece will probably have to leave the Euro, possibly beginning this week. It’s estimated that this will lead to a further 25% fall in the economy, on top of the 25% already lost since the crash. This will be catastrophic, and seriously threaten Greek democracy. Syriza and the European left will, of course, present this as further evidence of a neo-liberal coup; but it’s simply further evidence that the left has lost the plot.

The greatest tragedy of all this is that nationalism wins. The anti-austerity left suddenly finds itself in bed with an anti-EU right, from Greece’s Nazi Golden Dawn party to our very own UKIP. Nationalism is the order of the day in Europe, and we’ve learned twice over in the past century what that can mean. The right rails against the free movement of people; the left rails against the free movement of goods, services and capital. But these are two sides of the same coin.

While I no longer subscribe to many of the Marxist ideas I once did, I am still as strong an internationalist as ever. The embrace of nationalism across the political spectrum is sad indeed. Sadder still, that the left has mostly abandoned internationalism altogether, and that the libertarian right is now the strongest bulwark against nationalism.

This is the end-game of the collapse of the progressive left, which began 30 years ago. If there is a liberal, progressive force in European politics today, it is hard to identify it. Left and right increasingly morph into one, nationalistic blob. With Syriza about to be discredited by a total failure to deliver, it’s likely the far-right will rise again. Vote Syriza, get Golden Dawn.

Moronic Referendums

Last week, the most comprehensive (and expensive) deal so far was put together by the European Union to save Greece (not to mention the rest of us) from uncontrolled default. Billed (naturally) as the deal that would solve all of Europe’s problems, it was inevitably oversold; yet it was a serious and worthy effort to draw a line under the Greek debt crisis and prevent the spread of the Greek disease to other countries. The deal would write off a portion of Greece’s debt and underwrite banks and governments that may be thrown into difficulties as a result. Markets rallied, as they always do when a little tension is relieved, then slid downward again once the financial dealers of the world returned to work the next day, having consumed a little too much cocaine and fine wine the night before.

Then the unexpected happened: Greek Prime Minister Papandreou decided, without even first warning his cabinet or other EU leaders, to call a referendum on the deal. Europe’s leaders were mortified, as were Papandreou’s fellow cabinet ministers, and of course the markets. The decision was bizarre at many levels. Greeks have been hugely punished for the atrocious financial management of Greek governments (mostly not Papandreou’s, but the conservative administration that preceded it). Incomes have fallen by a shocking amount in a short time, and many Greeks are unable to make ends meet. But the decision was a moronic one: it was impossible to organise a referendum before Greece was owed €8bn from the EU, meaning it would have to default on some debts, and be unable to pay public workers at a time when they are already living on the bread line. It was a slap in the face for other EU countries (chiefly Germany) who were keeping Greece afloat at their own, huge, expense. And the concept of the referendum itself was simply moronic – the Greek people would effectively be asked whether to face financial hardship or the meltdown of their democracy. One can’t help but sympathise with Papandreou who is under unbelievable pressure, but the decision seemed to show he had lost the plot completely.

A rebellion in the government forced Papandreou to U-turn and the referendum was cancelled again within a few days.

I had tweeted that the referendum decision was moronic, and was met with a response from a number of tweeters, left and right, that I was “opposing democracy” or “opposing the right of the Greek people to decide”. I’m not ideologically opposed to referendums, but I can’t think of many cases where they make sense. We (in most of Europe and the US) have representative democracies rather than direct democracies for good reason: most of the population don’t have the time or the inclination to inform themselves on complex issues, nor should they have to – that’s why we have professional politicians, and provide them with the funding to employ economists, historians, political scientists, statisticians and so on.

Attempts by economists to quantify the options have put the cost of preventing a crash at €1tn to €2tn – a mind-blowing amount of cash. Attempts to quantify the alternative are difficult, as chaos is basically unpredictable: would the EU unravel? Would that lead to trade wars or actual wars? The only firm answer seems to be that the cost of not saving Greece would be many times higher than of saving it. Does it make sense to allow the people to make that decision?

The question would seem simple enough: Should Greece accept or reject the EU deal? But more honestly, it would say: Should Greece continue with this pain and try to turn the economy around, or should we face economic collapse, a likely military coup, and drag the rest of Europe down with us? Is it ethical to give Greeks a say as to whether Italy, Spain, France and eventually the rest of Europe down with it? What right do they have to decide that? In reality, Greeks had their say years ago: they elected weak or corrupt leaders who failed to tax the wealthy, and who funded improved lifestyles for the Greek people using cheap loans from European banks. It’s harsh, but it happened. Why not give the Norwegians a referendum on whether it should be sunnier in mid-winter? Surely they have the right to decide that? It would be equally nonsensical – the poor Greek people need and deserve leaders who will make tough but informed decisions on their behalf, not useless paper exercises of “choice” when there is no choice.

The nationalistic British right is becoming equally agitated in their demand for a referendum on whether Britain should leave the EU. If you listen to the small minority who actually understand the implications of that choice, you’ll hear that an exit would cause huge, lasting damage to the British economy. A referendum may fairly be phrased: Do you want to see a large cut in your standard of living or not? To which the average Brit may actually make an informed decision. But masking that as “do you want to exit the European Union?” would be another question which 90% of the population is unqualified to answer. You could, of course, make voting contingent on demonstrating a good understanding of the economic and historical issues – which thankfully would exclude most of the electorate. But if you did that, why not just ask those people who are actually qualified instead?

Earlier this year, the British people heavily rejected the Alternative Vote, a minor change to our voting system that would have improved the quality of our democratic process and given us more of a say over who governs us. It was a moronic decision – but how were most voters to know that? They took their lead from the moronic tabloid newspapers. And they represented the interests of the two main political parties, which would have lost their power duopoly under the new system. So rather than spend time and money asking the electorate, why not just ask unelected newspaper owners instead? It would be fast, cheap and give exactly the same result.

Referendums allow the mob to decide, and the mob is easily swung. Two years ago in Switzerland (which runs a system of direct democracy), the people voted to ban the building of tall towers. But not all tall towers: specifically those attached to mosques, also known as minarets. The Swiss, not the most racially diverse people, basically ran an exercise in minority-lynching, in full public view. Democracy at its best? If democracy is another word for lynching, I’ll give it a miss, thanks. As a member of the Jewish minority comprising about 0.3% of the UK population, the thought of such a system of “democracy” makes me queasy.

And look at California: the state adopted a system of direct democracy, allowing measures to be added to every ballot and voted on in each election. Given that most people have little time to research every ballot proposition, the propositions that make it are usually backed by big money interests. In trying to give more power to the people, California instead gave more power to wealthy vested interests. The results? More people in prison (thus profiting prison operators and prison unions). And the biggest debt of any US state. Why? Because people, quite naturally, vote for better services but no tax rises. Who wouldn’t?

Wouldn’t I like referendums on issues of concern to me? It may have been nice to stop the Iraq war from going ahead, for example. Except, we wouldn’t have been able to stop it. If a referendum was called, we’d have been bombarded by the media with the same lies and fear that MPs were, and the majority of people, unable to separate fact from fiction, would have buckled and voted for war. Love or hate our MPs, and moronic as many of them are, they’re still far better informed on world issues than the average Brit. They took the wrong decision on Iraq. So would have most British people.

There are many ways to improve our democracies: elected employee representatives on corporate boards, the right to recall our representatives, freedom of information so journalists can tell us what our politicians are up to, and proportional forms of voting so no vote is wasted. But referendums? They don’t improve democracy, they’re just a straightforward race to the bottom.

Yes2AV Is The Least Moronic Choice

On May 5th, the British people get a rare opportunity to vote in a referendum over the way we’re governed. The choice is to retain First Past The Post (FPTP) or switch to the Alternative Vote (AV) system. Two warring camps have emerged: Yes2AV and No2AV, each (of course) with its own Twitter hashtag.

The campaign has been messy; the better-funded and organised No2AV camp has strong financial backing from the Conservative Party, and has run a series of effective smear campaigns, including:

  • AV would require complex voting machines and cost vast amounts of money (false).
  • AV is too complex for “ordinary people” to understand (nonsense – it simply allows the voter to have multiple choices rather than one).
  • AV would benefit extremist parties (not true, the reverse in fact – which is why the BNP oppose AV).

Unfortunately the Yes2AV campaign has been diverted to responding to these attacks and has failed to make a clear case. I think the case for AV over FPTP is clear and easily argued as follows:

The Partisan Case – how will my party fare?

  • Conservative: FPTP is designed to keep the Tories in power. You should vote No.
  • Labour: likely to be more neutral, as Labour will get second-preference votes from Green and LibDem voters. Vote Yes to weaken the Tories.
  • Minority left-of-centre parties (Green, LibDem, Socialist, etc.): this will benefit you as you can now place your first choice for your party rather than vote tactically. Vote Yes.
  • Minority right-of-centre (UKIP): this will benefit you for the same reason as above. Vote Yes.
  • Far-right (BNP, English Democrat, etc.): Your best chance of coming to power is to win 30% in a FPTP challenge. Vote No.

The Objective Case – which is a better system?

  • FPTP is ancient and hugely discredited, and has been abandoned in most mature democracies. It makes voting pointless for most people in the country as most constituencies are safe seats for either Conservative or Labour. It therefore discourages participation, which weakens our democracy. A party can win with as little as 30% of the vote.
  • Other than the UK, the main user of FPTP is the United States. This system has crushed all but two parties which are both funded by the same corporate interests; this is about as undemocratic as a democracy can be.
  • AV won’t smash, but will weaken the two-party duopoly on power, giving the opportunity for the much-needed rise of new parties, which could then modify British politics in an evolutionary rather than revolutionary manner.
  • FPTP encourages the creation of broad, monolithic parties which are effectively ready-made coalitions and have no clear message; both Labour and the Tories attempt to cover very broad ranges of attitudes. This was reflected well by the Blair government, where voters voted left-of-centre but got a right-of-centre government anyway.
  • It’s true that AV represents a smaller step than many reformers would like; but its rejection on May 5th will be taken as a rejection of any change, and kill our last chance of reform, doubtless for many decades. Don’t forget that the political establishment hates the idea of any reform (as it would alter the status-quo). There is no chance that we would get asked again if the vote is No.
  • The only large political party that supports any electoral reform is the Liberal Democrat party. A No vote risks destroying the LibDems, leaving no political player that would campaign for any future reform.

It may not be ideal, but it’s the only chance we have for change. Vote YES on May 5th!