Radical austerity's brutal lies: How Krugman and Chomsky saw through dehumanizing neoliberal spin

The battle in Greece is identical to the one we need to be waging right here for fairness over markets and banks

Published July 8, 2015 11:00PM (EDT)

  (Reuters/Brendan McDermid/AP/Nader Daoud)
(Reuters/Brendan McDermid/AP/Nader Daoud)

The referendum in Greece refuting the European Union’s unbending insistence on radical austerity as the medicine Greeks must continue to swallow is simply not to be missed for its multiple layers of significance. To put the core take-home first, we are all Greeks as they stand against the neoliberal orthodoxy. Their battle is perfectly of a piece with one that needs to be called by its name and waged in our great country.

The Greek crisis has given us an altogether exposing moment, to put the point another way. It is universal in all that it lays bare about the world’s political economy as it has come to be over the last, say, four decades.

Three understandings—recognitions, maybe—were immediately plain as the polling results came in Sunday evening. The Tsipras government, left social democratic in its thinking, won a triumphant 61 percent of the electorate’s support in its stand against the E.U.’s utterly irrational desire to impose more human suffering in the name of market principles. And the magnitude of the victory underscored the truths Greece just gave us:

• Greeks voted courage over fear. They insisted that there is a value higher than market value—this value being the commonweal, the well-being of a society and the people who comprise it. They asked, Does the polity serve the market, or does the market serve the polity? This is one of the essential questions of our time, however rarely it gets asked. Posing it is a very large deed in itself, a favor to all others, and the Greeks’ reply is larger still, of course.

• The European Union, with roots in the too-distant idealism of the early postwar years, has just destroyed any claim it had to stand among humanity’s higher aspirations. The E.U. will remain, obviously, but effectively in form only—a collection of powerful but hollow institutions that inspire little loyalty. Its nakedly corrupt use of power against Greek democracy devastates what may have remained of its original ambition. For now at least, there is no reason to do anything other than oppose it in the name of the very thing it was supposed to stand for: human freedom.

• “What’s going on with the austerity is really class war,” Noam Chomsky said in an interview with the estimable Amy Goodman on this site a few days ago. It is time we got used to this term, which requires that we discredit our densely layered mythologies to the effect that class conflict occurs elsewhere but never in our Providential land. Greeks ’r’ Us: In what they have just done we must see what must be done in America if this nation is to avoid letting the neoliberal order subvert it altogether.

Alexis Tsipras’ last speech on the eve of the referendum is a remarkable document. Unless you speak Greek, you have to read it in an English translation of the French translation, but it comes over clearly nonetheless. (And isn’t it interesting that the French would translate it but no one in the Anglo-American world would bother?)

Tsipras addressed “citizens of Athens, people of Greece,” sounding a little like a fifth century B.C. orator. He spoke of “mutual respect,” “solidarity," “living with dignity in Europe,” “bravery,” “strength,” “democratic tradition.”

He spoke of the E.U.’s “rhetoric of terror,” which I find a perfectly defensible description of its disgraceful campaign to spread fear among Greek voters in the days prior to the vote. “We are giving democracy a chance to return,” Tsipras said. “To return to Europe, because we want Europe to return to its founding principles.”

Tsipras drew his best-known line, repeated on the wires quickly afterward, from a 19th century Greek poet. “Liberty demands virtue and courage,” he said, invoking the phrase several times before he finished. I had to remind myself as I read: This guy is 40 years old and already a master of his head, his heart and his principles.

We should think about this speech. What was Tsipras talking about? OK, he wanted to move his electorate, but what about the way he chose to do it? Why did he evoke the Greek past and the Greek character so fulsomely—“this passion, this anxious desire for life, this anxious desire for hope, this anxious desire for optimism”?

Start to finish, Tsipras had one thing on his mind: values. What are the values by which we should live? From what do we all derive our identities? These were his implicit questions, to which his answers could not have been clearer.

Among E.U. officials, Tsipras and his government have been dismissed since he took office in January as amateurs, irresponsible grandstanders, dreamers, dangers, neophytes, incompetents. The technocrats in Brussels and Frankfurt would never in a millennium take any interest in this kind of thinking, to say nothing of learning from it, and this is entirely natural: They do not respect any such values and do not think Europeans should live by them.

Gradually since the early 1970s, when American corporations and political elites began to consolidate the neoliberal order as we now have it, it has come to determine Europe’s direction, too. The Greek crisis, if we understand it as essentially political rather than financial or economic, was thus 40 years or so in the making. Sooner or later, neoliberalism was going to collide with someone or other’s democratic process.

Yanis Varoufakis, Tsipras’ now departed finance minister, sent out a superbly revealing tweet after the prime minister announced the referendum late last month and the E.U. started in on its campaign to subvert the Syriza government in favor of one more pliant. “Democracy deserves a boost in euro-related matters,” Varoufakis wrote. “We have just delivered it. Let the people decide. (Funny how radical this concept sounds.)”

Depends on what you mean by “funny.” I take the funny part to be a measure of just how far we have let our values slide in the face of neoliberalism’s 40-year advance toward cast-iron orthodoxy. You have to take a page from Elvis Costello at this point and ask, What’s so funny about human dignity, strength, virtue (in the sense of moral character and humane intent)?

Lionel Jospin, the Socialist premier of France on either side of the millennium, used to say, “Market economy, not market society.” Sensible and modest, you may think, but name a European leader who would touch such a thought with a pole these days. Another measure of how far and fast we have come (or gone).

I dwell on this question of values because the Greeks have just shown us something very vital. Neoliberalism, as it operates through corporations, political elites, and corrupted media striking poses of authority, does not degenerate only our towns, traditions, environments, local fabric, culture and so on. At bottom it is well along in destroying the values that give value, in turn, to all such things.

It is thus essential to understand values as the field of decisive battle. This lets us redraw all the lines in the right places—which is a good description of what Tsipras has persuaded Greeks to do. What is the goal, the purpose? What can be compromised and what is beyond compromise? These questions become easier to ask and answer—as we must require ourselves to do. Sacrifice is easier to accept.

*  *  *

When I look at the E.U. now I marvel at the power of neoliberal ideology. I say this because it is in the service of the ideology, plain and simple, that Europe’s technocratic class and many of its leaders have just destroyed the union itself in its most important dimension—as an idea, a source of identity, a form of human organization that could transcend the eternally warring nation-state.

It is gone, decimated in the six-month interim since Greeks voted Syriza into power, which makes this a moment of history, surely. This said, the moment was that 40 years mentioned above in the making.

It pains me to write this, honestly, as I had long bought into the ideal as articulated as early as 1946. A unified Europe was to be a peaceful, democratic, one-for-all entity.

Luisa Passerini, an interesting Italian scholar, traces the idea of Europe back to the 17th century and finds concrete proposals for a federated Europe as early as the 19th. Even more interesting, she finds in “Europe,” the notion, a long thread of emotional bonding: Greeks and Belgians would be Greek and Belgian but Europeans together.

Intellectual construct, political construct, psychological and even emotional construct: What of it is left now? Post-Greece, it is sheer illusion to pretend any longer that membership has anything to do with abstractions such as identity—or even the preservation of the democratic process, given Brussels and Berlin just tried to subvert Greece’s.

Varoufakis now likens the E.U. to a debtors’ prison. Who could have imagined such talk when the euro was launched in 1999? In his recent book, “The Global Minotaur: America, Europe, and the Future of the Global Economy,” he put it this way:

Europe is looking like a case of alchemy-in-reverse: for whereas the alchemist strove to turn lead into gold, Europe’s reverse alchemists began with gold (an integration project that was the pride of its elites) but will soon end up with the institutional equivalent of lead.

How to explain what the E.U. has just done? For months one has had to ask, Why does Europe insist on intensifying the very policies that measurably worsened Greece’s predicament, turning disaster into calamity?

There are a few answers.

One, the E.U. and Germany are ducking responsibility. So long as they insist on more austerity they do not have to acknowledge the strategy’s failure. As Paul Krugman has pointed out repeatedly in his New York Times columns, Greece has done nearly everything demanded in the two previous bailout plans only to find its circumstances worsened. Let Greeks suffer in the cause of our political reputations: This is in essence the position. Disgraceful, of course.

Two, the power of ideological belief and the out-of-hand rejection of all imaginative thinking both derive from the reality Chomsky named: Austerity and the neoliberal orthodoxy it manifests are at bottom forms of class war. When we recognize this, the mystery starts to evaporate.

Failed policies, malnourished Greeks, widespread homelessness, shuttered schools and hospitals—none of it counts as more than collateral damage in the campaign to turn Greece into a low-wage, low-cost, deregulated park wherein global corporations can do more or less what they like.

Third, it is time to put the E.U. in the file with all other supra-national institutions developed in the post-1945 period. The three I have in mind are the World Bank, the International Monetary Fund and the United Nations. Anyone who does not recognize these as instruments deployed in the West’s campaign to roll the neoliberal order across the globe like linoleum needs to look more objectively at events.

Back in the early 1970s, Shirley Hazzard, the Australian-cum-British-cum-American writer, published a scathing account of the U.N. called “Defeat of an Ideal,” and the title tells you the sad tale this book recounts. An institution founded on hope and aspiration ends up a gross betrayal of its own purpose—not least, in the U.N.’s case, because Washington insisted on waging the Cold War in its corridors.

Hazzard concluded that the U.N. should be dissolved so that the community of nations could begin again and retrieve the original principles written into the charter. I am not quite there yet with the E.U. Tsipras is right to try to keep his country in the eurozone, but I doubt he is looking for fraternal harmony.

I doubt he has any illusions, either, as to the long-term prospects of an enduring accommodation between a social democratic populace and a set of neoliberal institutions answerable to no electorate. Tsipras needs a deal to spare 11 million Greeks more suffering and chaos, full stop. I do not think we should look for more to come of this.

In the space of six months I have surrendered a lot of illusions—the illusions of an American, for I long (and naively) looked to Europe to evince some alternative to America’s military-centered assertion of its ambitions. It does, but the distinction is merely one of means, not ends: In the Greek case, Europe wanted regime change in Athens and probably still does. It prefers to do with bond debt what Washington likes to do with bombs.

Parenthetically, think about the Ukraine crisis in this light. The same very modest distinction applies. Washington and the Europeans continue to bicker about method—how to yank Ukraine westward, violently or otherwise—but no more.

The dream is over. What can I say?

Just one final point, actually.

The term “class war” is powerfully provocative in the American context. You do not use it unless you are willing to put up your dukes, for the myth of America as a middle-class nation with no contesting endowed and deprived extremes is a wide plank in the platform of our claim to exceptionalism. How many times have you heard the trusty, “We’re all in this together”—articulated most frequently when it is perilously obvious that we are not?

We Americans would do very well, then, to reflect on the Greeks’ predicaments for what we may learn about our own. In yet one more context, unless we overcome the exceptionalist narrative we stand little chance of understanding who we are, what is being done to us, and what we must do.

Last Sunday, Greeks told the rest of us they are perfectly clear on all three points. Are they not to be envied in this respect, even amid their sufferings and struggles.

By Patrick L. Smith

Patrick Smith is Salon’s foreign affairs columnist. A longtime correspondent abroad, chiefly for the International Herald Tribune and The New Yorker, he is also an essayist, critic and editor. His most recent books are “Time No Longer: Americans After the American Century” (Yale, 2013) and Somebody Else’s Century: East and West in a Post-Western World (Pantheon, 2010). Follow him @thefloutist. His web site is patricklawrence.us.

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