Greece: Is the European Union Too Pig-Headed to Survive?

By Steve Weissman, Reader Supported News

28 July 15

augh, cry, or scream at their demands for even harsher austerity, the European Union is now doing to Greece what President Big Dog never did to Monica Lewinsky. But, with the terrifying justice of classic Greek tragedy, the ultimate victim will likely be Europe itself. Just watch as German chancellor Angela Merkel and her hubristic Eurocrats make themselves a much-too-easy target for the growing hordes of Euro-skeptics, many of them Christian Nationalists, white supremacists, and born-again fascists.

“Today we’re talking about Grexit,” the Front National’s Marine Le Pen said last month of Greece exiting the Euro. “Tomorrow it will be Brexit, and the day after tomorrow it will be Frexit.” By “Brexit” and “Frexit,” she was talking up her hope that Britain and France will leave all of the EU.

“I’ll be Madame Frexit if the European Union doesn’t give us back our monetary, legislative, territorial and budget sovereignty,” she said.

For or against the European Union or the Euro, giving Le Pen and her far-right allies such a sweeping victory would not have a happy ending. Not for Europe. Not for progressive change on either side of the Atlantic. And certainly not for non-Europeans living in Europe – especially Muslims, who have largely replaced Jews as the prime scapegoats and targets of hate.

Groups like Podemos, in Spain, are already fighting to build a less xenophobic and more socially just alternative, and are publicly showing solidarity with the Greek cause. So are political leaders like Bernie Sanders in the United States. But the movement remains relatively weak and badly needs a much clearer understanding of neo-liberal economics and the role it has played in making the EU so much of a government front for coddled capitalism and tax-havened high finance. If you think Wall Street and the .1% totally control Washington D.C., you really need to spend some time in Brussels and Frankfurt.

No one has done more to dramatize this subservience than Greece’s former finance minister, the congenitally undiplomatic Yanis Varoufakis. An internationally respected economist suddenly thrust into government, he repeatedly tried to discuss with his Eurocratic interlocutors the most basic questions of his academic trade as they applied to his homeland. Call it a Socratic version of Econ 101, which Professor Paul Tyson has neatly summarized for Open Democracy.

How would asphyxiating Greek banks and killing the Greek state help the economy recover and repay its debts? How would a contractionary austerity agenda make it possible to generate surpluses sufficient to repay impossible debt burdens? Where was the economic rationality?

The answers from Brussels were always the same: No answers at all. Europe’s cocksure commissars of capitalism did not want to hear what a real economist had to say. And, I would add, they certainly did not want to hear from one who had been teaching in the United States and understood first-hand why Washington and even the economists at the IMF were backing away from the neo-liberal orthodoxy of the Washington Consensus that President Clinton had once preached as gospel.

In short, the Eurocrats were not about to discuss with Varoufakis their outmoded and discredited economic theories. Their job was to defend a quasi-religious orthodoxy, and they honestly felt offended when Varoufakis warned that the “reforms” they were imposing on Greece will “go down in history as the greatest disaster of macroeconomic management ever.”

Tyson sees the orthodoxy as imposed by the multinational industrial and financial giants, for whom “even big players, such as Chancellor Merkel, are pawns.” After all, the titans are well represented within the IMF and European institutions. Mario Draghi, now head of the European Central Bank, was formerly managing director and vice-chairman of Goldman Sachs International in London, while several other “technocrats” in the European institutions and IMF have enjoyed similar if less exalted career paths. In Brussels, as in Washington, the revolving door plays a large part in the way the world works.

This is clearly part of the story. But with apologies to Professor Tyson, austerity is not some economic commandment handed down from CEOs on high. It is more a political and ideological construct, and one that weakens capitalism by reducing growth, as economists like Paul Krugman and Joseph Stiglitz have argued for years.

Never having been a lukewarm leftist, I hardly want to strengthen capitalists, but let’s tell it like it is. Frau Merkel and her flinty finance minister Wolfgang Schäuble are largely hawking the shopworn ideas of “libertarian economics,” the scientifically bogus and historically flawed doctrine spelled out by the Austrian-born economist Friedrich Hayek in his 1944 book, The Road to Serfdom. The ideas were then popularized and expanded by an inbred and overlapping network that included Hayek’s Mont Pelerin Society, his one-time mentor Ludwig von Mises, Herbert Read’s Foundation for Economic Education (FEE) at Irvington-on-Hudson in New York, the John Birch Society, ancestral home of the Koch Brothers, Milton Friedman’s “boys” at the University of Chicago, and Antony Fisher’s Institute for Economic Affairs in London, one of the think tanks that most shaped Margaret Thatcher’s remake of Britain.

Call them “libertarians,” “neo-liberals,” or by the narrower term “austerians,” these groups generally attracted corporate backing to fight an ideological Cold War against Soviet Communism, the New Deal in America, and welfare states across Europe. But they did the intellectual, ideological, and political work – and not just what the bosses told them to do.

In much the same way, EU politicos unleashed the austerian mumbo-jumbo initially to justify using public money to bail out the big European banks that helped Wall Street spread the global economic crash that began in 2007-2008. Now Merkel & Co think they need to continue it to keep their economically illiterate voters in line and hold together their tattered dreams for a more united Europe.

We’ll soon see if they’re right, but if the traditions of Greek tragedy hold, they have mostly fooled themselves. Unless new forces on the left emerge with a more persuasive ending, Europe’s pig-headed austerity will only help the far right destroy much of the Euro, gravely weaken the EU, and use their victory to usher in a dark night of anti-migrant, anti-Muslim mayhem.

A veteran of the Berkeley Free Speech Movement and the New Left monthly Ramparts, Steve Weissman lived for many years in London, working as a magazine writer and television producer. He now lives and works in France, where he is researching a new book, "Big Money and the Corporate State: How Global Banks, Corporations, and Speculators Rule and How to Nonviolently Break Their Hold."

Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.