Europe’s economic crisis is being
transformed by the day into a deep political crisis. Italy and Greece
both have new governments – governments of “national unity”, pledged to
solve the economic and financial crisis that has rocked Europe to its
foundations. What are these so-called technocratic governments and what
do they represent?
Europe’s economic crisis is being
transformed by the day into a deep political crisis. Italy and Greece
both have new governments – governments of “national unity”, pledged to
solve the economic and financial crisis that has rocked Europe to its
foundations. What are these so-called technocratic governments and what
do they represent?
“Pure democracy” is the
mendacious phrase of a liberal who wants to fool the workers. History
knows of bourgeois democracy which takes the place of feudalism, and of
proletarian democracy which takes the place of bourgeois democracy…“Take
the bourgeois parliament. Can it be that the learned Kautsky has never
heard that the more highly democracy is developed, the more the
bourgeois parliaments are subjected by the stock exchange and the
bankers? This does not mean that we must not make use of bourgeois
parliament…. But it does mean that only a liberal can forget the
historical limitations and conventional nature of the bourgeois
parliamentary system as Kautsky does. Even in the most democratic
bourgeois state the oppressed people at every step encounter the crying
contradiction between the formal equality proclaimed by the ‘democracy’
of the capitalists and the thousands of real limitations and subterfuges
which turn the proletarians into wage-slaves. It is precisely this
contradiction that is opening the eyes of the people to the rottenness,
mendacity and hypocrisy of capitalism. It is this contradiction that the
agitators and propagandists of socialism are constantly exposing to the
people, in order to prepare them for revolution!”(V.I. Lenin, The Proletarian Revolution and the Renegade Kautsky 1918)
The bankers rule
May 15, Madrid, "Real Democracy Now!" Photo: arribalasqueluchanEurope’s
economic crisis is being transformed by the day into a deep political
crisis. Italy and Greece both have new governments – governments of
“national unity”, pledged to solve the economic and financial crisis
that has rocked Europe to its foundations. What are these so-called
technocratic governments and what do they represent?
The Independent (Sunday 20 November) writes:
“Political
power in Europe has passed to a tiny elite of technocrats. Two days
after the economist Lucas Papademos was sworn in as Prime Minister of
Greece, another technocrat, Mario Monti, was asked to lead a new unity
government in Italy.”
Isn’t this perfectly clear? In
Italy and Greece, political power does not reside in the parliaments,
and still less with the electorate. It is in the hands of a tiny elite
of unelected technocrats. It is not democratically elected governments
but the faceless technocrats in the German finance ministry, European
Central Bank, the IMF and the European Commission, who will decide the
future living conditions of the people of Greece, Italy and the whole of
Europe. But in whose interests do these “technocrats” act? The same
article explains:
“Technocrat here is a euphemism for
someone who has worked at or with the investment bank Goldman Sachs,
nicknamed in financial circles ‘the vampire squid’. Mr Monti was a
member of Goldman’s board of international advisers. Mario Draghi, the
new president of the European Central Bank which controls eurozone
monetary policy, is a Goldman man. So is Antonio Borges who, until
Wednesday, was running the International Monetary Fund’s European
division. Mr Papademos is a former vice-president of that same European
Central Bank; he is also the man who was running the Central Bank of
Greece at the time when that country, like Italy, used complex
derivatives to slim down the apparent size of its government debts in
order to qualify to join the euro. The rules of the euro mandated that
such debts shouldn’t be above 60 per cent of the size of the economy.
Who was behind that clever idea? The financial wizards of Goldman
Sachs.”
In the Europe of the banks and big
monopolies, democracy is a convenient fiction. In the EU neither the
Council of Ministers nor the Commission are directly elected, while the
European Parliament is a mere talking shop with no real say in the big
decisions. The markets rule, which is to say, the boards of directors of
a handful of big banks and monopolies decide everything. They decide
what happens to the savings, investments, insurance policies and
pensions of millions of people. They have their fingers in every pie.
They buy civil servants as easily as one would buy a pound of potatoes
in the market – only the price is somewhat higher.
The bankers’ coup
Already in the pages of The Communist Manifesto Karl Marx explained that the executive of the modern state “is but a committee for managing the common affairs of the whole bourgeoisie”.
In
a capitalist society the rule of law, human rights, the freedom of the
press and everything else are subjugated to the economic imperatives of
the market. In a bourgeois democracy everybody can say (more or less)
what they want, as long as the bankers and capitalists decide what
actually happens.
In the epoch of imperialism and monopoly
capitalism, this is even truer than in the past. The bourgeoisie has
finally cast aside the fig leaf of democracy that hitherto served to
conceal the reality of the hidden dictatorship of the banks and
monopolies. The banks and big monopolies are completely entangled with
the state. Politicians are bought and sold like any other commodity.
Governments are the obedient servants of big business.
On Friday, Nov. 11, Time magazine published an article by Stephan Faris with the title: Regime Change in Europe: Do Greece and Italy Amount to a Bankers’ Coup? It says the following:
“The
voice of the people isn’t something the markets seem to want to hear
these days. First there was Greece, the cradle of democracy itself,
where early this month, the merest mention of a referendum offering its
citizens a say in a series of severe austerity measures was enough to
send the markets into a tailspin. The ultimate result: the collapse of
Prime Minister George Papandreou’s ruling coalition, the rejection of
any notion of bringing the proposal before the people, and the
installation of a caretaker government under the leadership of Lucas
Papademos, a former vice president of the European Central Bank and,
until earlier this week, a visiting professor at Harvard.“Then
came Italy. As Athens threatened to go under, Rome found itself under
pressure not so much for its level of debt — which though high is
generally considered within the limits of sustainability — as much as
for the erratic behaviour of its flamboyant prime minister, Silvio
Berlusconi. On Monday [Nov. 7], investors seemed to make the collective
decision that he could no longer be trusted at the helm of the euro
zone’s third largest economy and sent Italy’s cost of borrowing up
towards crisis levels. By the end of the week, not only was Berlusconi
finished, so was the very idea of holding a vote to replace him. The
markets had spoken, and they didn’t like the idea of going to the
electorate. ‘The country needs reforms, not elections,’ said Herman Van
Rompuy, president of the European Council on a visit to Rome Friday.”
The
rumour is whispered in corners of the Rome parliament that Berlusconi’s
removal amounts to a banker’s coup. “Yesterday, in the chamber of
deputies we were bitterly joking that we were going to get a Goldman
Sachs government,” Time quoted a parliamentarian from
Berlusconi’s government, who asked to remain anonymous citing political
sensitivity. The government of Silvio Berlusconi finally sank under the
weight of its own rottenness, mired in scandal and reeking of corruption
from every pore. Berlusconi engaged in the most scandalous manipulation
of the legislative process to promote the interests of his personal
business empire. Although Berlusconi was formally elected by millions of
votes, he did not represent the people who elected him. As a matter of
fact, he did not really represent the Italian bourgeoisie, or rather; he
did not represent them adequately. He represented mainly himself and
his most earnest desire to stay out of jail.
For two decades
Italy’s corrupt and degenerate political class allowed this farce to
continue, while simultaneously allowing Italy to sink ever deeper into
debt. Now history has caught up with them. But what have the people of
Italy got in its place? The imposition of Mario Monti as Italian prime
minister amounted to a “market coup”, which has suspended the normal
workings of parliamentary democracy in Greece and Italy. Unelected
bureaucrats in Brussels decide who is in charge of a major Western
nation. Italy is now ruled by a man who has never been elected to any
public office, a senior adviser at Goldman Sachs and former European
Commissioner.
Monti is one of Italy’s most eminent economists, but
he has never been elected by anybody. The Italian President Napolitano
called him into his office and made him a senator – for life. He then
asked him to form a new government to rule Italy. Nobody thought it
worth the trouble of asking the people of Italy for their opinion about
all this. What is interesting was the ease with which the markets were
able to kick Berlusconi out of office. Even more significant was what
they replaced him with.
“Democracy has very serious limitations”
says Roberto D’Alimonte, a professor of political science at Rome’s
LUISS University. “It has the ability to kill itself, to self-destruct.
[Bringing in a technocratic government] is not good or bad. It’s
necessary.”
In these weasel words are contained the distilled
essence of all the treachery, hypocrisy and cowardice of the “liberal”
bourgeois intelligentsia. It is the servile, bootlicking mentality of
the professors who bowed low before Hitler and Mussolini, Napoleon and
Cavignac.
The most remarkable thing of all is that such a
monstrous aberration is taken as something perfectly normal and
acceptable. In fact, it is indeed perfectly normal, but people did not
see it.
The Greek referendum crisis
The euro zone put
tremendous pressure on Papandreou to force him to implement a savage
programme of cuts in the teeth of massive opposition. But when George
Papandreou announced he would hold a referendum to allow the people to
endorse or reject the latest euro zone bailout, there was a horrified
reaction in European capitals. “What’s this? The Greeks are going to be
asked their opinion? What a monstrous suggestion! Beggars cannot be
choosers! Let them pay up and shut their mouths!” What if the Greeks
actually voted no?
Papandreou’s referendum proposal was not made
out of any fervent commitment to the principles of democracy but as a
cynical political gamble. However, it is not necessary to support
Papandreou’s policies or tactics to understand that the people of Greece
had every right to express an opinion over a plan that signified a
drastic cut in their living standards. But the bankers and capitalists
believe in democracy only to the extent that it does not conflict with
their interests or harm their bank balances.
The French Premier
Sarkozy expressed the attitude of the bourgeois to democracy very well
when he said: “Giving people a voice is always legitimate but the
solidarity of all eurozone countries is not possible unless each one
agrees to measures deemed necessary”. In other words, the interests of
the eurozone (that is to say, the eurozone bankers and capitalists) must
take precedence over democracy.
Thereafter events moved swiftly.
Berlin and Paris moved to topple the Greek Premier. Merkel and Sarkozy
demanded Athens prove its commitment to the monetary union. This was
crude blackmail and a blatant interference in the internal affairs of a
supposedly sovereign state. In the eyes of Angela Merkel and Nicolas
Sarkozy the crime of both Papandreou and Berlusconi was that they did
not do enough to uphold the interests of the European bankers – in
particular the French and German bankers. The displeasure of the leaders
of France and Germany was enough to bring about the fall of both men –
with a little prompting from the bond markets.
Papademos, an
economist like Monti, is a former Vice President of the European Central
bank. He therefore enjoys the confidence of the markets as a man who is
likely to push the austerity programme through. For now the two main
political parties have agreed to support him. But when things begin to
hot up, they can renounce responsibility.
The bourgeoisie
calculates that a so-called technocratic government will be able to
manoeuvre between the parties to pass unpopular legislation. It claims
to stand above politics, above classes and above party and factional
interests. Neither Monti in Italy nor Papademos are accountable to the
public in their respective nations. This isn’t a problem. Indeed, it is
the very reason they were called in. Their masters in the EU are
demanding deep cuts in public spending, sharp tax increases and other
painful measures. No politician in his right mind would wish to face the
electorate after doing all that. So the poisoned chalice has been
passed to a government of unelected technocrats.
Who really holds the power?
On the very same day that Time magazine wrote about “regime change in Europe”, The Independent had
this to say about the Italian affair and the crisis in Europe: “The
European Central Bank is under ex-Goldman management, and the investment
bank’s alumni hold sway in the corridors of power in almost every
European nation.”
It is worth while pondering over these lines and what they mean. The article continues:
“Even
before the upheaval in Italy, there was no sign of Goldman Sachs living
down its nickname as ‘the Vampire Squid’, and now that its tentacles
reach to the very top of the eurozone, sceptical voices are raising
questions over its influence. The political decisions taken in the
coming weeks will determine if the eurozone can and will pay its debts –
and Goldman’s interests are intricately tied up with the answer.”
Simon Johnson, former International Monetary Fund economist, in his book 13 Bankers,
writing about the political influence of Goldman Sachs, says. “What you
have in Europe is a shared world-view among the policy elite and the
bankers, a shared set of goals and mutual reinforcement of illusions”.
This
is a very polite way of putting it. It would be more correct to say:
Goldman Sachs has its tentacles everywhere and has governments in its
pocket. In theory, Goldman Sachs is there to “provide advice” and financing
for governments, but in practice, it issues orders.
By a
combination of skilful lobbying, bribery, infiltrating its people into
public service and incorporating former politicians into lucrative jobs,
it entangles governments in a spider’s web, where the dividing line
between public and private interests is abolished.
From this fact
we can see who really holds the political power. Governments do not
rule the world: Goldman Sachs rules the world. A handful of super rich
individual on the board of directors of an investment bank that one
might have thought was politically toxic, holds in its hands more power
than 60.6 million Italian citizens.
Let us take Monti as an
example. He was appointed to the European Commission in 1995 by
Berlusconi. As commissioner for competition, he was supposed to exercise
control over the takeover and merger deals – the kind of deals that
Goldman Sachs was involved in. Later he chaired the Italian Treasury’s
committee on the banking and financial system.
Naturally Goldman Sachs
invited him to join its board of “international advisers”, who act as
informal lobbyists for Goldman’s interests with governments and
politicians. These include Otmar Issing, a board member of the German
Bundesbank and then the European Central Bank, and one of the architects
of the euro.
The Goldman Sachs Project specialises in recruiting
well-connected former politicians. Among the prominent ex-politicians
inside the bank is Peter Sutherland, attorney general of Ireland in the
1980s and another former EU Competition Commissioner. He is now
non-executive chairman of Goldman’s UK-based broker-dealer arm, Goldman
Sachs International.
That is one half of the equation. The other
half consists of sending Goldman Sachs agents into government itself. Like
Mario Monti, Mario Draghi, who took over as president of the ECB on 1
November, has alternated spells in government and in Goldman Sachs. An
economist by training, he was a member of the World Bank and managing
director of the Italian Treasury before spending three years working as
managing director of Goldman Sachs International between 2002 and 2005.
He now returns to government as president of the Italian central bank.
Monopoly capitalism and democracy
When
the Greek colonels took power in 1967, Phillips Talbot, the US
ambassador in Athens, lamented it as “a rape of democracy”. His cynical
CIA chief of station replied: “How can you rape a whore?” The junta took
away all democratic rights and condemned thousands to imprisonment and
torture. This shows the real attitude of the capitalist class to
democracy.
The bankers and capitalists of Europe support democracy
because it is the most economical way to defend their interests. But
when it ceases to do so, they can pass from democracy to dictatorship
with the same ease as a man passing from one railway carriage to
another.
The same politicians who are always making grandiloquent
speeches about democracy in Iraq, Afghanistan, Libya, Syria and Burma
conveniently overlook the systematic erosion of those democratic rights
that were conquered through struggle by the working class of Europe and
the United States.
Their interests are upheld by politicians and
bureaucrats who act strictly in accordance with the rules of the
“free-market economy”, which nowadays is free only insofar as it is free
to plunder the coffers of national states. National sovereignty thus
becomes a hollow phrase, as meaningless as “private enterprise” and
“democracy” in the epoch of monopoly capitalism and imperialism.
The
so-called rescue funds from the IMF and the largely German-backed
European Financial Stability Facility are designed, not to rescue Greece
or Ireland, but to rescue the banks. Who are these creditors who are
demanding to be paid? They are Europe’s big banks, and it is their
health that is the primary concern of policymakers. The brutal austerity
measures that will be imposed by the unelected “technocratic”
governments in Athens and Rome have been dictated by the banks.
The
argument that “we are all in this together”, which is supposed to be
the theoretical justification for governments of “national unity,” is
false to the core. While millions of ordinary people suffer brutal cuts
in their living standards, the same bankers who caused the financial
collapse in 2008 award themselves lavish bonuses. Smart traders with
inside information make huge fortunes whether the markets go up or down.
Millions lose their employment, their home, their future, but the
bankers win all the time.
It is often stated that the profits of
the bankers are justified because of the risks they take when lending
money. But in fact there is no risk at all. The financial elite are very
sure that the banks will be bailed out with public money, and some of
them are even now placing wagers on just such an outcome. “My former
colleagues at the IMF are running around trying to justify bailouts of
€1.5trn-€4trn, but what does that mean?” says Simon Johnson. “It means
bailing out the creditors 100 per cent. It is another bank bailout, like
in 2008.” That puts matters very neatly.
European governments
must find billions of Euros, not to rescue the people of Greece or any
other country, but in reality to arrange yet another bailout of the
banks. And to pay for this the masses are expected to shoulder the heavy
burden of austerity, cuts in living standards and unemployment. All
this is to protect the interests of Goldman Sachs and the other
parasitic financial entities that have attached themselves to the living
body of society and are draining it of its life’s blood.
The
whole of society is being held to ransom by a handful of wealthy
bankers. They say: “either give us the money we demand, or else we will
plunge the world into the abyss of a new financial crisis, a terrible
economic collapse that will be worse than the last one.” These methods
are substantially the same as those of the Mafia who demand money with
menaces. The only difference is that the Mafia issues threats to
individuals or single businesses, whereas the bankers threaten entire
nations and their governments.
Class struggle
The
governments of Italy and Greece are effectively in the hands of the
banks. And this is not only the case in Italy and Greece but in every
single “democratic” capitalist country. In Britain, Germany, France and
the United States it is the same story: democracy has become a
meaningless expression. It has been emptied of any real content it may
once have had, and all that is left is an empty husk. The forms of
parliamentary democracy remain, but the content is: government of the bankers, by the bankers and for the bankers.
In
the short term an excuse has been provided by the threat of a market
meltdown and a subsequent economic collapse. The appointment of Mario
Monti was designed to exercise a calming effect on the markets. It
appears to have succeeded – for now. Doctor Johnson once famously
remarked: “Depend upon it, sir, when a man knows he is to be hanged in a
fortnight, it concentrates his mind wonderfully.”In
Italy the political class looked into the abyss and it concentrated
their minds immediately. Mario Monti was greeted with applause in the
Senate when taking his new Senate seat on 11 November. The same day
country’s stock exchange gained 3.68% as the new Saviour of capitalism
seemed to be at hand.
Initially, at least in Italy, the protests
have been muted. The reason is not difficult to understand. After the
Berlusconi government, anything would seem better. But this tolerance
will not last long. In the end neither Papademos nor Monti will be able
to push anything through if there is no solid consensus on what must be
done. And the lack of consensus will soon be exposed, leading to a new
explosion of popular dissent and anger. Already there have been
demonstrations of the students. This is just the beginning.
For a
time it is possible that the public might be willing to accept the new
impositions and austerity packages. But this fragile arrangement will
not last. All the manipulations of Angela Merkel and Nicolas Sarkozy and
all the bankers in the world will not prevent an explosion of the class
struggle. The social turbulence on the streets of Athens will return
and will be replicated on the streets of Italy.
In Greece, after
almost two years of constant struggles, there may be an element of
tiredness and confusion. Nobody believes in the political class any
more. The vast majority of the people are against the austerity
measures, but see no alternative. They fear the prospect of a
precipitate exit from the euro, with further chaos and turmoil. But when
the people see that the “national unity” government is carrying out an
even worse austerity programe than that of Papandreou, they will be on
the streets once more.
The idea of “national unity” is the
emptiest of all empty political slogans. The “unity” they have in mind
is the unity between the horse and the rider who jumps on the horse’s
back and digs his spurs into its side. There can be no question of unity
between rich and poor, exploited and exploiter, workers and
capitalists. In order to solve the problems of society it is necessary
to put an end to the bankers’ dictatorship once and for all.
Everywhere
the bourgeois is attempting to take away all the conquests that the
working class has won in struggle over the past fifty years. In Britain
the Tories and Lib Dems are threatening to limit the right to strike,
which has already been severely circumscribed. But such measures will
not halt the class struggle. What is written in working class
organization cannot be abolished by the stroke of a lawyer’s pen.
Naturally,
the working class must fight to defend its gains. We will fight for
democratic rights insofar as those rights retain even the slightest
progressive content. We do so, not because we are slavish worshippers of
formal democracy, but because we understand that bourgeois democracy
provides the workers with a more favourable terrain on which to develop
the class struggle.
The imposition of an unelected government of
so-called technocrats will not halt the class struggle. The bourgeois
will soon discover that they are leaning on a broken reed. These
governments will not be stronger than the ones based on political
parties and elected politicians but infinitely weaker. They will soon be
swept aside by the movement of the masses.
If the road of
parliamentary democracy is blocked, the working class will find other
means of expressing itself. It will express itself through the
mechanisms of direct action and the class struggle: strikes, general
strikes and mass demonstrations. The workers and youth will come to
understand that they represent a colossal power that no state, army or
police can halt. They will come to realise the truth of the words of the
great French revolutionary leader Camille Desmoulins:
“Les grands ne sont grands que parce que nous sommes à genoux: Levons-nous.”
“They only seem so mighty to our eyes
because we kneel before them: let us rise!”
