Tag Archives: Austerity

Defend the Greek workers! Oppose the diktat of Schäuble and Merkel!

By Partei für Soziale Gleichheit
July 14, 2015
World Socialist Web Site


The Partei für Soziale Gleichheit (PSG—Socialist Equality Party) denounces the agreement forced on Greece by German Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble at Sunday’s euro group summit. We call upon workers in Germany and throughout Europe to declare their solidarity with the workers in Greece and organize mass resistance to the policies of the German government.

The new austerity demands, to which the government of Greek Prime Minister Alexis Tsipras capitulated on Monday morning, go far beyond the measures the Greek population rejected, by a large majority, in the referendum held just one week before. For millions of Greeks, the implementation of these measures means poverty, unemployment, disease and even death. Greece will be transformed into a de facto protectorate of Germany and the most powerful European financial interests.

The troika (European Union, European Central Bank and International Monetary Fund) is returning to Athens and will dictate government policy. The role of parliament is to be reduced to rubber-stamping austerity measures and signing off on automatic budget cuts. State property valued at €50 billion will be transferred to a fund, to be sold off to the highest bidder, modeled on the Treuhandanstalt, set up in 1990 to liquidate state property in East Germany.

The agreement amounts to a carte blanche for the ruthless exploitation and plundering of the Greek working class.

Even establishment commentators could not overlook the agreement’s undemocratic character. In the Financial Times, Wolfgang Münchau accused Greece’s creditors of reverting to “the nationalist European power struggles of the 19th and early 20th century” and transforming the euro zone into a system “run in the interests of Germany” and “held together by the threat of absolute destitution for those who challenge the prevailing order.”

Paul Krugman in the New York Times accused the euro group of “pure vindictiveness, complete destruction of national sovereignty, and no hope of relief.”

The brutal actions of Schäuble and Merkel recall the darkest chapter in German history. Less than seventy-five years have passed since Hitler’s Wehrmacht occupied Greece, established a brutal regime of terror, and ruthlessly plundered the country. The imposition of high occupation costs, the export of virtually all of Greece’s industrial goods, and the theft of machinery and vehicles led to a famine that took the lives of hundreds of thousands of people.

The Wehrmacht responded to resistance from partisan fighters by massacring the inhabitants of numerous villages, including Distomo, Lingiades and Kommeno. At least 30,000 civilians fell victim to these reprisals. Eight thousand Jews were deported and murdered, and the Jewish community in Thessaloniki, one of the world’s oldest, was completely wiped out. None of the victims were ever compensated, and virtually none of the perpetrators were punished.

Schäuble and Merkel are now walking in the footsteps of their predecessors. The German ruling class is spewing forth all the undigested filth of the past. Their arrogance suggests that they see themselves, once again, as Europe’s master race.

The politicians are supported by a spineless press, for which no cliché or prejudice is too cheap to be hurled at the Greek people. The media spread propaganda and do everything in their power to confuse and mislead the public.

The government also relies on historians such as Jörg Baberowski of Humboldt University, who falsifies history to trivialise German crimes in World War II. It is backed by economists, who declare the impoverishment of the Greek working class a historical necessity, and political scientists, such as Herfried Münkler, who formulates the political arguments for German hegemony in Europe.

All of the parties represented in the German parliament support the government. The Social Democratic (SPD) chairman Sigmar Gabriel has led the way, seeking to outdo Schäuble and Merkel from the right.

They are all convinced that history has been forgotten. But they are deceiving themselves. The working class of Greece, Germany and Europe cannot and will not allow them to repeat Germany’s historic crimes.

The German government is pursuing two goals in its aggressive actions in Greece. It intends to set an example to intimidate all resistance to its austerity course in Europe and Germany. And it seeks to strengthen its hegemonic domination of Europe.

By the time of the 2008 financial crisis, the government had decided that Germany could no longer maintain its dominance through compromises and financial assistance. Germany had to become, in the words of Münkler, Europe’s “taskmaster,” instead of its “paymaster.” Early last year, leading government officials demanded that Germany play a role in Europe and the world that corresponded to its actual influence.

This new great power politics was first tested out in Ukraine, where the German government backed the pro-Western coup that has driven the country to civil war and brought NATO to the brink of a military confrontation with nuclear-armed Russia. These same policies are being continued in what amounts to a civilian coup in Athens.

The face of the European Union has been transformed in the process. It is becoming ever more obvious that the EU is not a mechanism for the peaceful coexistence of Europe’s peoples, but rather an instrument for the predominance of the most powerful imperialist powers and the ruthless exploitation of the working class. Masses of people now view the EU with a mixture of disgust and hatred.

The more openly Germany uses the EU to attain the position of a world power, the more intense the national conflicts within Europe become—above all between Germany and France. Prior to Sunday’s summit there were sharp exchanges between Berlin and Paris, which, due to domestic political considerations, was favoring a more conciliatory course towards Greece. The French government eventually submitted to Germany’s dictates because it fears the threat from its own working class much more than it fears German hegemony. These tensions, however, will flare up again, as will the developing conflict between the US and Germany over who will control Europe.

It is the task of the working class in Germany and throughout Europe to oppose these dangerous actions, which threaten to plunge the working class into desperate poverty, and the continent, once again, into war and dictatorship. To this end, it is vital to draw the lessons of the events in Greece and the role played by Syriza.

It is hard to find a parallel in history to the cowardly and shameful betrayal carried out in the past few days by Tsipras and his government. Elected in January on the basis of a promise to end austerity, Tspiras’ party made one concession after another to Berlin and Brussels.

Finally, it organized a referendum, hoping that a majority would favour the EU-backed austerity measures. Confronted, instead, with an overwhelming majority against austerity, it capitulated completely to the German diktat within a week. Even a right-wing bourgeois government would not have gone so far.

This surrender confirms the PSG’s assessment that Syriza is not a left, and certainly not a socialist, party, but rather a pseudo-left organization representing wealthy, selfish middle class layers primarily concerned with their own well-being. They have nothing but contempt for the working class, which they fear. Their capitulation is grist for the mill of far-right extremists such as Golden Dawn, which, from a reactionary, nationalist standpoint, poses as a more determined opponent of the dictates of Brussels and Berlin than does the supposedly “left” Syriza.

What is true for Syriza also applies, as well, to its international co-thinkers, including the Left Party in Germany and Podemos in Spain.

The Left Party bears immense responsibility for the fate of Greece. In February, it voted for the “aid program” for Greece, including the austerity measures attached to it. Occasionally it criticizes the policies of the German government, in order to maintain a shred of credibility, but it has done absolutely nothing to support the Greek workers.

It has refused to organize a single demonstration in their defense. If the Left Party assumes power in Berlin, it will pursue the same course as Syriza. This has already been proven by its record in power at the state level.

The Left Party works closely with the trade unions, which have sought to aid the German government by shutting down and selling out strikes by train drivers, postal and daycare workers, hospital employees and other professionals.

The working class of Germany must rise to the defense of its class brothers and sisters in Greece. The PSG calls upon all workers involved in social struggles, all young people and the entire working population: Support the Greek workers! Organize solidarity strikes against the dictates of Schäuble and Merkel! Break with the Left Party and the SPD and organize independently!

The fundamental question is the necessity of building a revolutionary leadership—in Greece, Germany and throughout the European continent. Join the PSG, the German section of the International Committee of the Fourth International, and build sections of the ICFI all over Europe that will fight for the unity of the European working class and the establishment of the United Socialist States of Europe!



Greek government approves brutal austerity measures in proposal to EU

By Alex Lantier
July 10, 2015
World Socialist Web Site


Greece’s Syriza-led government agreed to a massive new €13 billion (US$14.34 billion) package of austerity measures yesterday evening, less than a week after Sunday’s landslide “no” vote in a referendum on European Union (EU) austerity.

The proposal would be the deepest package of cuts since the EU austerity drive began in Greece in late 2009. It goes well beyond the proposed €8 to 9 billion in cuts initially demanded by the EU in talks with Syriza.

The 13-page proposal was submitted to the EU, International Monetary Fund (IMF) and European Central Bank (ECB) before the midnight deadline previously set by the institutions. In exchange for cuts, the Greek government is reportedly asking for a €53.5 billion ($59.2 billion) loan to the Greek state and some form of debt restructuring, allowing it to avoid state bankruptcy and remain in the euro currency area.

The austerity measures reportedly include sharp increases in the regressive VAT sales tax and an increase in the retirement age to 67 by 2022. The elimination of additional payments to the poorest pensioners will take place by the end of 2019, a year earlier than previously scheduled.

Plans for the privatization of state assets, including ports and airports, will go forward. The proposal also includes a reported increase of the corporate tax to 28 percent, rather than 29 percent, a reduction requested by the IMF.

In proposing the new austerity package, Syriza has with extraordinary rapidity repudiated the vote in Sunday’s referendum, which Syriza itself had called and presented as a model of democratic accountability. More than 61 percent of the population rejected precisely the measures that the government has now adopted.

Even as Syriza officially called for a “no” vote, Tsipras had no intention of fighting EU austerity. The prime minister expected to lose the vote and, in response, abandon office and leave it to another government to impose the cuts. (See also: Tsipras petitions EU for new austerity deal)

Following the vote, the Syriza-led government has moved as quickly as possible to reach an accommodation with the pro-austerity parties within Greece and approve a deal that would be acceptable to the European banks.

The measures were finalized in discussions between Greek Prime Minister Alexis Tsipras, Deputy Prime Minister Yiannis Dragasakis, Finance Minister Euclid Tsakalotos and Economy Minister Giorgios Stathakis—all from the ruling Syriza (“Coalition of the Radical Left”) party—and adopted by the Greek cabinet on Thursday.

The government is planning to seek a vote in the Greek parliament today, relying on support from the openly pro-austerity New Democracy and PASOK parties. On Saturday, eurozone finance ministers are scheduled to meet to review the proposal, followed by a meeting Sunday of the EU leaders.

The new austerity proposal was rushed through amidst threats from European officials to entirely cut off funding for Greece and force the country out of the eurozone. In response to these threats, Syriza continually refused to take any measures that would threaten capitalist property relations and rejected any appeal to workers throughout Europe for a common struggle against austerity.

It is uncertain whether an agreement will be approved by the EU, even on the surrender terms being offered by Syriza. Sections of the European ruling class are discussing forcing Greece to default on its debts, expelling it from the euro zone, and pushing it through a drastic economic crisis by forcing it to restore a devalued national currency.

German Finance Minister Wolfgang Schaeuble said yesterday that any significant restructuring of Greece’s debt was unlikely, as this would violate EU rules.

Other European officials have indicated a desire to reach agreement with the Greek government. Syriza members told the Guardian that French finance ministry officials had worked with Greek Finance Minister Tsakalotos to rewrite the austerity package Athens was proposing, in order to make it acceptable to the EU.

Donald Tusk, the chair of the EU summit, urged European officials to take certain measures to allow Greece to pay back its debt. “The realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors,” Tusk said.

Germany has also come under pressure from the Obama administration to ensure that Greece is not pushed out of the eurozone. On Wednesday, US Treasury Secretary Jack Lew publicly intervened to push for an agreement on austerity between Greece and the EU and call for some form of “debt restructuring.”

Criticizing those who “create more of these kind of life-and-death deadlines,” Lew said they were creating far greater economic and political risks, including a broader financial panic across southern Europe and the possible splitting of Europe. The US wants to ensure that Greece remains within NATO and continues to support the campaign of military and economic aggression against Russia.

With Greece’s banks still closed and depositors limited to €60 in daily cash withdrawals amid the crisis, the Greek economy is rapidly grinding to a halt.

The National Confederation of Hellenic Commerce released a report Wednesday that found that consumption had fallen 70 percent since the closure of Greece’s banks, costing €1.2 billion to the economy. Greeks are reportedly stocking up on key medicines as well as non-perishable foods, such as rice and pasta, fearing a possible collapse of supplies of imported food and medicine.

Planned US Coup in Greece?

By Stephen Lendman
July 08, 2015
Global Research


alexis-tsiprasWashington’s geopolitical strategy when bullying fails is either assassinating independent leaders, color revolutions, military coups or naked aggression.

If Moscow-based independent investigative journalist John Helmer is right, Greek Prime Minister Alexis Tsipras is a marked man and SYRIZA governance on thin ice showing cracks:

 ”(a) putsch in Athens to save allied Greece from enemy Russia is in preparation by the US and Germany, with backing from the non-taxpayers of Greece  – the Greek oligarchs, Anglo-Greek shipowners, and the Greek Church.”

“At the highest and lowest level of Greek government, and from Thessaloniki to Milvorni, all Greeks understand what is happening. (Sunday) they voted overwhelmingly to resist.”

“According to a high political figure in Athens, a 40-year veteran, ‘what is actually happening is a slow process of regime change.’ “

Wherever neocon Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland shows up (Hillary Clinton’s handpicked choice for the job), trouble usually follows.

Helmer says she’s “in charge of warmaking in Europe.” Her notorious involvement in Ukraine’s February 2014 coup is well documented.

According to Helmer, she gave Tsipras two ultimatums in Athens last March – surrender to Troika demands and remain allied with US-dominated NATO’s anti Russian agenda.”

Her spokeman Mark Toner said Washington is “focused on, frankly, the opposite (of Sunday’s referendum), which is finding a path forward that allows Greece to continue to make reforms (more austerity), return to growth (by letting Troika bandits rape its economy and population), and remain in the Eurozone.”

Since the 19th century, Greece had five military coups or attempted ones. Junta dictatorship ruled from 1967 – 1974. Another one can’t be ruled out.

Over five dozen former high-ranking military officials fired a shot across the bow declaring their “oath to the Fatherland and the Flag. By choosing isolation, we place the Fatherland and its future in danger,” they warned.

They publicly called for a “yes” vote ahead of Sunday’s referendum. Will not getting it mobilize them along with other Greek dark forces, Washington and Brussels to oust Tsipras forcibly or otherwise?

Grexit “will make our country weaker,” they claimed – even though Greeks weren’t asked about it and most oppose the idea. “We will lose allies that have stood by our side. We will lose the strength we gain from associations and groupings to which we belong historically and culturally,” the former military officials said.

Ties to Washington and Brussels run counter to what best serves long-suffering Greeks.

Will conditions be made worse than ever by greater austerity if coup rumblings become reality? Is this US/Eurogroup’s Plan B?

Helmer cited political sources in Athens saying Tsipras and other SYRIZA officials acted preemptively to prevent one – replacing military and intelligence leadership with their own “but not radically.”

Moscow remains skeptical about Tsipras withstanding Washington/Brussels pressure – especially given dominant Germany’s hardline position.

He faces enormous pressure. His six months in office shows he promises Greeks one thing and does another.

He agreed to nearly all Troika demands. Not good enough. They want total surrender. Germany’s Merkel and France’s Hollande told him to capitulate fully for further bailout aid.

Greek banks remain closed. They’re close to collapse. The ECB raised the amount of collateral they must post for further emergency loans.

Does Finance Minister Varoufakis’ resignation signal Tsipras’ capitulation to follow – negating popular opposition to austerity he pledged to support?

Hollande spoke for himself and Merkel saying Tsipras must “offer serious, credible proposals” for bailout help – code language for demanding unconditional surrender, a Greek Versailles.

He and new Finance Minister Euclid Tsakalotos are heading to Brussels for further talks. Hardline Troika officials intend cutting them no slack.

Will Tsipras cave to their demands and betray millions of Greeks in the process? Given his record so far in office, it’s hard imagining otherwise. Hopefully he’ll surprise but don’t bet on it.

Stephen Lendman lives in Chicago. He can be reached at lendmanstephen@sbcglobal.net.

His new book as editor and contributor is titled “Flashpoint in Ukraine: US Drive for Hegemony Risks WW III.”


Visit his blog site at sjlendman.blogspot.com.

Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.

It airs three times weekly: live on Sundays at 1PM Central time plus two prerecorded archived programs. 

Greece — The One Biggest Lie You Are Being Told By The Media

By Global Research News
Global Research, July 05, 2015
Truth and Satire, July 3, 2015


No to blackmail and austerityBy Truth and Satire

Every single mainstream media has the following narrative for the economic crisis in Greece: the government spent too much money and went broke; the generous banks gave them money, but Greece still can’t pay the bills because it mismanaged the money that was given. It sounds quite reasonable, right?

Except that it is a big fat lie … not only about Greece, but about other European countries such as Spain, Portugal, Italy and Ireland who are all experiencing various degrees of austerity. It was also the same big, fat lie that was used by banks and corporations to exploit many Latin American, Asian and African countries for many decades.

Greece did not fail on its own. It was made to fail.

In summary, the banks wrecked the Greek government, and then deliberately pushed it into unsustainable debt … while revenue-generating public assets were sold off to oligarchs and international corporations. The rest of the article is about how and why.

If you are a fan of mafia movies, you know how the mafia would take over a popular restaurant. First, they would do something to disrupt the business – stage a murder at the restaurant or start a fire. When the business starts to suffer, the Godfather would generously offer some money as a token of friendship. In return, Greasy Thumb takes over the restaurant’s accounting, Big Joey is put in charge of procurement, and so on. Needless to say, it’s a journey down a spiral of misery for the owner who will soon be broke and, if lucky, alive.

Now, let’s map the mafia story to international finance in four stages.

Stage 1: The first and foremost reason that Greece got into trouble was the “Great Financial Crisis” of 2008 that was the brainchild of Wall Street and international bankers. If you remember, banks came up with an awesome idea of giving subprime mortgages to anyone who can fog a mirror. They then packaged up all these ticking financial bombs and sold them as “mortgage-backed securities” for a huge profit to various financial entities in countries around the world.

A big enabler of this criminal activity was another branch of the banking system, the group of rating agencies – S&P, Fitch and Moody’s – who gave stellar ratings to these destined-to-fail financial products. Unscrupulous politicians such as Tony Blair joined Goldman Sachs and peddled these dangerous securities to pension funds and municipalities and countries around Europe. Banks and Wall Street gurus made hundreds of billions of dollars in this scheme.

But this was just Stage 1 of their enormous scam. There was much more profit to be made in the next three stages!

Stage 2 is when the financial time bombs exploded. Commercial and investment banks around the world started collapsing in a matter of weeks. Governments at local and regional level saw their investments and assets evaporate. Chaos everywhere!

Vultures like Goldman Sachs and other big banks profited enormously in three ways: one, they could buy other banks such as Lehman brothers and Washington Mutual for pennies on the dollar. Second, more heinously, Goldman Sachs and insiders such as John Paulson (who recently donated $400 million to Harvard) had made bets that these securities would blow up. Paulson made billions, and the media celebrated his acumen. (For an analogy, imagine the terrorists betting on 9/11 and profiting from it.) Third, to scrub salt in the wound, the big banks demanded a bailout from the very citizens whose lives the bankers had ruined! Bankers have chutzpah. In the U.S., they got hundreds of billions of dollars from the taxpayers and trillions from the Federal Reserve Bank which is nothing but a front group for the bankers.

In Greece, the domestic banks got more than $30 billion of bailout from the Greek people. Let that sink in for a moment – the supposedly irresponsible Greek government had to bail out the hardcore capitalist bankers.

Stage 3 is when the banks force the government to accept massive debts. For a biology metaphor, consider a virus or a bacteria. All of them have unique strategies to weaken the immune system of the host. One of the proven techniques used by the parasitic international bankers is to downgrade the bonds of a country. And that’s exactly what the bankers did, starting at the end of 2009. This immediately makes the interest rates (“yields”) on the bonds go up, making it more and more expensive for the country to borrow money or even just roll over the existing bonds.

From 2009 to mid 2010, the yields on 10-year Greek bonds almost tripled! This cruel financial assault brought the Greek government to its knees, and the banksters won their first debt deal of a whopping 110 billion Euros.

The banks also control the politics of nations. In 2011, when the Greek prime minister refused to accept a second massive bailout, the banks forced him out of the office and immediately replaced him with the Vice President of ECB (European Central Bank)! No elections needed. Screw democracy. And what would this new guy do? Sign on the dotted line of every paperwork that the bankers bring in.

(By the way, the very next day, the exact same thing happened in Italy where the Prime Minister resigned, only to be replaced by a banker/economist puppet. Ten days later, Spain had a premature election where a “technocrat” banker puppet won the election).

The puppet masters had the best month ever in November 2011.

Few months later, in 2012, the exact bond market manipulation was used when the banksters turned up the Greek bonds’ yields to 50%!!! This financial terrorism immediately had the desired effect: The Greek parliament agreed to a second massive bailout, even larger than the first one.

Now, here is another fact that most people don’t understand. The loans are not just simple loans like you would get from a credit card or a bank. These loans come with very special strings attached that demand privatization of a country’s assets. If you have seen Godfather III, you would remember Hyman Roth, the investor who was carving up Cuba among his friends. Replace Hyman Roth with Goldman Sachs or IMF (International Monetary Fund) or ECB, and you get the picture.

Stage 4: Now, the rape and humiliation of a nation begin. For the debt that was forced upon them, Greece had to sell many of its profitable assets to oligarchs and international corporations. And privatizations are ruthless, involving everything and anything that is profitable. In Greece, privatization included water, electricity, post offices, airport services, national banks, telecommunication, port authorities (which is huge in a country that is a world leader in shipping) etc.

In addition to that, the banker tyrants also get to dictate every single line item in the government’s budget. Want to cut military spending? NO! Want to raise tax on the oligarchs or big corporations? NO! Such micro-management is non-existent in any other creditor-debtor relationship.

So what happens after privatization and despotism under bankers? Of course, the government’s revenue goes down and the debt increases further. How do you “fix” that? Of course, cut spending! Lay off public workers, cut minimum wage, cut pensions (same as our social security), cut public services, and raise taxes on things that would affect the 99% but not the 1%. For example, pension has been cut in half and sales tax increase to more than 20%. All these measures have resulted in Greece going through a financial calamity that is worse than the Great Depression of the U.S. in the 1930s.

Of course, the ever-manipulative bankers demand immediate privatization of all media which means that the country now gets photogenic TV anchors who spew propaganda every day and tell the people that crooked and greedy banksters are saviors; and slavery under austerity is so much better than the alternative.

If every Greek person had known the truth about austerity, they wouldn’t have fallen for this. Same goes for Spain, Italy, Portugal, Ireland and other countries going through austerity.The sad aspect of all this is that these are not unique strategies. Since World War II, these predatory practices have been used countless times by the IMF and the World Bank in Latin America, Asia, and Africa.

This is the essence of the New World Order — a world owned by a handful of corporations and banks.

So, it’s time for the wonderful people of Greece to rise up like Zeus and say NO (“OXI” in Greece) to the greedy puppet masters, unpatriotic oligarchs, parasitic bankers and corrupt politicians.

Dear Greece, know that the world is praying for you. Vote NO to austerity. Say YES to freedom, independence, self-government, and democracy. Yes, democracy, the word that was invented by YOU!

P.S. (You can also watch this video where John Perkins – author of “Confessions of an Economic Hit Man” – talks about exploitation of Latin American and Asian countries using the same tools of debt-austerity-privatization. He used to do this for a living!  

Copyright Truth and Satire, 2015

Karl Marx Was Right

By Chris Hedges
June 2, 2015
Truthdig, May 31, 2015


On Saturday at the Left Forum in New York City, Chris Hedges joined professors Richard Wolffand Gail Dines to discuss why Karl Marx is essential at a time when global capitalism is collapsing. These are the remarks Hedges made to open the discussion.

Karl Marx exposed the peculiar dynamics of capitalism, or what he called “the bourgeois mode of production.” He foresaw that capitalism had built within it the seeds of its own destruction. He knew that reigning ideologies—think neoliberalism—were created to serve the interests of the elites and in particular the economic elites, since “the class which has the means of material production at its disposal, has control at the same time over the means of mental production” and “the ruling ideas are nothing more than the ideal expression of the dominant material relationships … the relationships which make one class the ruling one.” He saw that there would come a day when capitalism would exhaust its potential and collapse. He did not know when that day would come. Marx, as Meghnad Desai wrote, was “an astronomer of history, not an astrologer.” Marx was keenly aware of capitalism’s ability to innovate and adapt. But he also knew that capitalist expansion was not eternally sustainable. And as we witness the denouement of capitalism and the disintegration of globalism, Karl Marx is vindicated as capitalism’s most prescient and important critic.

In a preface to “The Contribution to the Critique of Political Economy” Marx wrote:

No social order ever disappears before all the productive forces for which there is room in it have been developed; and new higher relations of production never appear before the material conditions of their existence have matured in the womb of the old society itself.

Therefore, mankind always sets itself only such tasks as it can solve; since looking at the matter more closely, we always find that the task itself arises only when the material conditions necessary for its solution already exist, or are at least in the process of formation.

Socialism, in other words, would not be possible until capitalism had exhausted its potential for further development. That the end is coming is hard now to dispute, although one would be foolish to predict when. We are called to study Marx to be ready.

The final stages of capitalism, Marx wrote, would be marked by developments that are intimately familiar to most of us. Unable to expand and generate profits at past levels, the capitalist system would begin to consume the structures that sustained it. It would prey upon, in the name of austerity, the working class and the poor, driving them ever deeper into debt and poverty and diminishing the capacity of the state to serve the needs of ordinary citizens. It would, as it has, increasingly relocate jobs, including both manufacturing and professional positions, to countries with cheap pools of laborers. Industries would mechanize their workplaces. This would trigger an economic assault on not only the working class but the middle class—the bulwark of a capitalist system—that would be disguised by the imposition of massive personal debt as incomes declined or remained stagnant. Politics would in the late stages of capitalism become subordinate to economics, leading to political parties hollowed out of any real political content and abjectly subservient to the dictates and money of global capitalism.

But as Marx warned, there is a limit to an economy built on scaffolding of debt expansion. There comes a moment, Marx knew, when there would be no new markets available and no new pools of people who could take on more debt. This is what happened with the subprime mortgage crisis. Once the banks cannot conjure up new subprime borrowers, the scheme falls apart and the system crashes.

Capitalist oligarchs, meanwhile, hoard huge sums of wealth—$18 trillion stashed in overseas tax havens—exacted as tribute from those they dominate, indebt and impoverish. Capitalism would, in the end, Marx said, turn on the so-called free market, along with the values and traditions it claims to defend. It would in its final stages pillage the systems and structures that made capitalism possible. It would resort, as it caused widespread suffering, to harsher forms of repression. It would attempt in a frantic last stand to maintain its profits by looting and pillaging state institutions, contradicting its stated nature.

Marx warned that in the later stages of capitalism huge corporations would exercise a monopoly on global markets. “The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe,” he wrote. “It must nestle everywhere, settle everywhere, establish connections everywhere.” These corporations, whether in the banking sector, the agricultural and food industries, the arms industries or the communications industries, would use their power, usually by seizing the mechanisms of state, to prevent anyone from challenging their monopoly. They would fix prices to maximize profit. They would, as they [have been doing], push through trade deals such as the TPP and CAFTA to further weaken the nation-state’s ability to impede exploitation by imposing environmental regulations or monitoring working conditions. And in the end these corporate monopolies would obliterate free market competition.

May 22 editorial in The New York Times gives us a window into what Marx said would characterize the late stages of capitalism:

As of this week, Citicorp, JPMorgan Chase, Barclays and Royal Bank of Scotland are felons, having pleaded guilty on Wednesday to criminal charges of conspiring to rig the value of the world’s currencies. According to the Justice Department, the lengthy and lucrative conspiracy enabled the banks to pad their profits without regard to fairness, the law or the public good.

The Times goes on:

The banks will pay fines totaling about $9 billion, assessed by the Justice Department as well as state, federal and foreign regulators. That seems like a sweet deal for a scam that lasted for at least five years, from the end of 2007 to the beginning of 2013, during which the banks’ revenue from foreign exchange was some $85 billion.

The final stages of what we call capitalism, as Marx grasped, is not capitalism at all. Corporations gobble down government expenditures, in essence taxpayer money, like pigs at a trough. The arms industry with its official $612 billion defense authorization bill—which ignores numerous other military expenditures tucked away in other budgets, raising our real expenditure on national security expenses to over $1 trillion a year—has gotten the government this year to commit to spending $348 billion over the next decade to modernize our nuclear weapons and build 12 new Ohio-class nuclear submarines, estimated at $8 billion each. Exactly how these two massive arms programs are supposed to address what we are told is the greatest threat of our time—the war on terror—is a mystery. After all, as far as I know, ISIS does not own a rowboat. We spend some $100 billion a year on intelligence—read surveillance—and 70 percent of that money goes to private contractors such as Booz Allen Hamilton, [which] gets 99 percent of its revenues from the U.S. government. And on top of this we are the largest exporters of arms in the world.

The fossil fuel industry swallows up $5.3 trillion a year worldwide in hidden costs to keep burning fossil fuels, according to the International Monetary Fund (IMF). This money, the IMF noted, is in addition to the $492 billion in direct subsidies offered by governments around the world through write-offs and write-downs and land-use loopholes. In a sane world these subsidies would be invested to free us from the deadly effects of carbon emissions caused by fossil fuels, but we do not live in a sane world.

Bloomberg News in the 2013 article “Why Should Taxpayers Give Big Banks $83 Billion a Year?” reported that economists had determined that government subsidies lower the big banks’ borrowing costs by about 0.8 percent.

“Multiplied by the total liabilities of the 10 largest U.S. banks by assets,” the report said, “it amounts to a taxpayer subsidy of $83 billion a year.”

“The top five banks—JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc.—account,” the report went on, “for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits. In other words, the banks occupying the commanding heights of the U.S. financial industry—with almost $9 trillion in assets, more than half the size of the U.S. economy—would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders.”

Government expenditure accounts for 41 percent of GDP. Corporate capitalists intend to seize this money, hence the privatization of whole parts of the military, the push to privatize Social Security, the contracting of corporations to collect 70 percent of intelligence for our 16 intelligence agencies, as well as the privatization of prisons, schools and our disastrous for-profit health care service. None of these seizures of basic services make them more efficient or reduce costs. That is not the point. It is about feeding off the carcass of the state. And it ensures the disintegration of the structures that sustain capitalism itself. All this Marx got.

Marx illuminated these contradictions within capitalism. He understood that the idea of capitalism—free trade, free markets, individualism, innovation, self-development—works only in the utopian mind of a true believer such as Alan Greenspan, never in reality. The hoarding of wealth by a tiny capitalist elite, Marx foresaw, along with the exploitation of the workers, meant that the masses could no longer buy the products that propelled capitalism forward. Wealth becomes concentrated in the hands of a tiny elite—the world’s richest 1 percent will own more than half of the world’s wealth by next year.

The assault on the working class has been going on now for several decades. Salaries have remained stagnant or declined since the 1970s. Manufacturing has been shipped overseas, where workers in countries such as China or Bangladesh are paid as little as 22 cents an hour. The working poor, forced to compete with the labor of those who are little better than serfs in the global marketplace, proliferate across the American landscape, struggling to live at a subsistence level. Industries such as construction, which once provided well-paying unionized jobs, are the domain of nonunionized, often undocumented workers. Corporations import foreign engineers and software specialists that do professional work at one-third of the normal salary on H-1B, L-1 and other work visas. All these workers are bereft of the rights of citizens.

The capitalists respond to the collapse of their domestic economies, which they engineered, by becoming global loan sharks and speculators. They lend money at exorbitant interest rates to the working class and the poor, even if they know the money could never be repaid, and then sell these bundled debts, credit default swaps, bonds and stocks to pension funds, cities, investment firms and institutions. This late form of capitalism is built on what Marx called “fictitious capital.” And it leads, as Marx knew, to the vaporization of money.

Once subprime borrowers began to default, as these big banks and investment firms knew was inevitable, the global crash of 2008 took place. The government bailed out the banks, largely by printing money, but left the poor and the working class—not to mention students recently out of college—with crippling personal debt. Austerity became policy. The victims of financial fraud would be made to pay for that fraud. And what saved us from a full-blown depression was, in a tactic Marx would have found ironic, massive state intervention in the economy, including the nationalization of huge corporations such as AIG and General Motors.

What we saw in 2008 was the enactment of a welfare state for the rich, a kind of state socialism for the financial elites that Marx predicted. But with this comes an increased and volatile cycle of boom and bust, bringing the system closer to disintegration and collapse. We have undergone two major stock market crashes and the implosion of real estate prices in just the first decade of the 21st century.

The corporations that own the media have worked overtime to sell to a bewildered public the fiction that we are enjoying a recovery. Employment figures, through a variety of gimmicks, including erasing those who are unemployed for over a year from unemployment rolls, are a lie, as is nearly every other financial indicator pumped out for public consumption. We live, rather, in the twilight stages of global capitalism, which may be surprisingly more resilient than we expect, but which is ultimately terminal. Marx knew that once the market mechanism became the sole determining factor for the fate of the nation-state, as well as the natural world, both would be demolished. No one knows when this will happen. But that it will happen, perhaps within our lifetime, seems certain.

“The old is dying, the new struggles to be born, and in the interregnum there are many morbid symptoms,” Antonio Gramsci wrote.

What comes next is up to us.

Chicago mayor demands wage, benefit cuts from teachers

By Kristina Betinis
May 7, 2015
World Socialist Web Site


After saying it would not extend the current teachers’ contract for an additional year because it could not afford a three percent wage increase that would come with it, the city of Chicago is demanding sweeping concessions in talks for a new agreement. This includes a seven percent pay cut in addition to higher health care contributions and diminished pensions.

Mayor Rahm Emanuel, who was recently re-elected in a runoff election last month, is using a largely manufactured budget crisis to demand the concessions from the city’s 32,000 teachers and other school employees whose contract expires on June 30.

The current contract was imposed after the defeat of the Chicago teachers’ strike in 2012. That struggle pitted teachers against Emanuel, Obama’s former chief of staff, and the assault on public education spearheaded by Obama and both big business parties in the name of “school reform.” The Chicago Teachers Union (CTU) gave in to Emanuel’s demands for the expansion of testing-based teacher evaluation and loosening restrictions on teacher layoffs.

Allied with the Democratic Party, the CTU betrayed the strike, paving the way for its collaboration in a record number of public school closures and related layoffs. The year 2013 saw fifty elementary schools closed, thousands of layoffs and the dislocation of tens of thousands of students, which exacerbated overcrowding and placed additional strains on remaining teachers and staff.

In demanding the pay cut, the Emanuel administration cites a $1.1 billion Chicago Public Schools budget shortfall. Budget shortfalls and a lack of tax revenue are also being used to press for deep cuts to the teachers’ pension system. In addition, Tax Increment Financing districts siphon existing tax revenue into a mayor-controlled account used to attract investment in wealthy areas.

City estimates for teacher pension underfunding is somewhere in the region of $7 billion. As of 2014, the Chicago Teachers Pension Fund claimed 44,473 members. (See, “City worker pensions under attack”) CPS spokesman Bill McCaffrey expressed hope the CTU would work with the school district in lobbying state leaders to resolve pension issues.

There have been recent calls in the Chicago Tribune and the business press, and from Illinois Republican Governor Bruce Rauner, for the Chicago Public Schools district to declare bankruptcy, with the goal of gutting the teacher pensions. Bankruptcy successfully paved the way for the slashing of pensions in Detroit, Michigan and Stockton, California.

Teacher pensions were introduced as a bargaining chip in the opening bid of the 2015 contract negotiations by none other than Chicago Teachers Union President Karen Lewis, who offered last year to negotiate a cut to teacher pensions for educators who have not yet retired, a move lauded in the business press.

Last week, CTU Vice President and ISO member Jesse Sharkey sought to diminish the importance of teacher compensation, declaring, “Money is not our membership’s biggest concern right now.”

This would be news to teachers who work in a city with one of the highest costs of living in the US.

The CTU has not publicly reported any of its own wage or benefit proposals, instead referring to proposals that included smaller class sizes and the hiring of counselors and nurses, neither of which can be bargained over.

Accepting the lie used to justify cuts all over the country—that there is no money—Sharkey continued, “If the district has no money to put a counselor in a school where a half-dozen kids get shot, or not enough money to have the counselor who’s there actually counsel, then they don’t have the money for a three percent raise, do they?”

Sharkey is a leading member of the International Socialist Organization. His comments only underscore the fact that the ISO, like its pseudo-left counter-part in Greece, Syriza, functions as a faction of the bourgeois political establishment.

Last week, school officials announced the smallest capital budget in 20 years. The $160 million budget to repair the city’s many dilapidated schools is about one third of last year’s budget. While claiming there is no money to improve schools or the wages and benefits of educators, Emanuel continues to provide tax breaks to major corporate interests in the city like Boeing and the Chicago Mercantile Exchange. Last month, Governor Rauner approved $100 million in corporate tax cuts.

While the majority of the city’s 400,000 public school students suffer, politically-connected charter school operators and other businesses continue to siphon money. Federal corruption investigations have been opened into Emanuel’s appointee to CEO of Chicago Public Schools, Barbara Byrd-Bennett, for awarding a $20.5 million no-bid contract to SUPES Academy, an education and training company for teachers and principals that Byrd-Bennett had previous business relationships with.

UK general election reveals crisis of capitalist rule

By Chris Marsden
April 27, 2015
World Socialist Web Site


The campaign for Britain’s May 7 general election has brought into sharp relief the fragility and instability of the country’s political system. The crisis engulfing the UK—Europe’s second largest economy, the world’s third largest share market and a key political and military ally of US imperialism—has major implications for political developments worldwide.

With just 10 days to go, no one can even begin to predict the election’s outcome.

The ruling Conservatives are polling slightly ahead or on par with Labour, but without sufficient votes to form a government. The Liberal Democrats face electoral meltdown as punishment for their role as partners in the Tory-led coalition. Labour has been unable to benefit substantially from massive anti-Tory sentiment due to its own lurch further to the right, meaning it too must look to some form of coalition.

Business wants the Tories in office as a proven vehicle for continued austerity. However, it fears that, given Prime Minister David Cameron’s promise of a 2017 in/out referendum on European Union membership, the Tories’ possible reliance on the UK Independence Party will result in a drawn-out “Brexit.” This is now considered by many in Europe as a more fundamental threat to the stability of the continent than the worsening crisis in Greece.

At the same time, the possibility of Labour Party leader Ed Miliband having to rely on the support of the Scottish National Party (SNP), predicted to wipe out Labour in Scotland, raises the spectre of a renewed push for Scottish independence and the break-up of the UK.

No combination of parties in government is excluded, including a government of national unity involving the Tories and Labour. Leading academics have warned that a possible second election is “extremely likely” and assessed the chance of a new coalition lasting five years to be “miniscule.”

The common theme of political commentary is the likelihood of a descent into prolonged political uncertainty and crisis.

One prominent commentator, Anatole Kaletsky, writes, “In the years ahead, Britain will likely be Europe’s most politically unpredictable country.”

The Economist speaks of “the great fracturing,” worrying that “if the parliamentary system comes to be seen as both unfair and ineffectual, then it is in for a crisis of legitimacy.”

There are dire warnings of companies relocating and investors withdrawing money from the UK. The banking giant HSBC is considering moving its headquarters from London over fears of an exit from the EU. Investment firm Nutmeg has cut its holdings of blue chip British shares by two thirds, noting that US investors sold $58 billion of British shares prior to last September’s Scottish referendum and has since bought back only half of what was unloaded.

No bourgeois commentator can honestly address the underlying reasons for the crisis of rule now emerging in the UK.

As with the conservative New Democracy and social democratic PASOK in Greece, the Popular Party and Socialist Party in Spain, and the Gaullist Union for a Popular Movement and Socialist Party in France, the traditional mechanisms through which the bourgeoisie has governed have been eviscerated due to their imposition of savage austerity measures.

This is an election dominated by one issue above all others—the ever-widening social chasm between a thin layer of the super-rich and the broad mass of working people, who comprise the vast majority of the population.

This week, the Sunday Times noted that Britain’s super-rich are now more than twice as rich as they were in 2009. The wealthiest 1,000 people based in Britain are collectively worth £547 billion. There are now 117 sterling billionaires based in Britain, more per head of population than in any other country.

This obscene wealth is being gouged out of the working class.

The Tories are pledged to tens of billions of pounds in new cuts, including £12 billion in welfare. Labour has promised a “Budget Responsibility Lock” committing it to cut the deficit every year.

The SNP, Plaid Cymru (Party of Wales) and Green Party pose as anti-austerity alternatives, seeking to exploit popular opposition to the Tories and Labour. However, none of these capitalist parties offers anything more than a somewhat slower pace in the implementation of austerity measures.

The Institute of Fiscal Studies found the SNP’s budgetary policies to be “essentially the same” as Labour’s. All of these parties have made clear that the votes they receive will be handed to Labour in a “progressive alliance”—in reality, an “austerity alliance”—should the Tories be unable to form a government.

The nationalist SNP and Plaid Cymru and their allies among the pseudo-left groups play the essential role of dividing the working class in the face of the common enemy and tying workers to one or another section of the bourgeoisie.

The public declarations of the major parties are worthless lies designed to conceal what is being planned. The calculations they make for public consumption are based on continued economic growth at a time when a fresh plunge into crisis for the British, European and world economy is inevitable.

Looming over the election is the turn to militarism and war.

There is a conspiracy of silence over this danger. Meanwhile, against a background of massive naval exercises off Scotland, air war games over South Wales involving 13,000 NATO troops, and the repeated scrambling of fighter jets and ships to escort Russian vessels out of UK waters, the Tories and Labour are competing to demonstrate which party will be the firmer ally of the United States in the escalating conflict with Russia and China.

The election campaign began with the despatch of British military advisors and trainers to Ukraine and Syria. Either country could become the flashpoint for a broader war.

The SNP and Plaid Cymru pose as opponents of the Trident nuclear submarine programme while making clear their loyalty to NATO. They and the Greens speak of developing Britain’s conventional armed forces.

The Socialist Equality Party is standing Katie Rhodes in Glasgow Central and David O’Sullivan in Holborn & St. Pancras in London. We advance an independent political perspective to mobilise the working class in the fight for a workers’ government pledged to socialist policies as part of the struggle for a United Socialist States of Europe and a world socialist federation.

Our election campaign has been conducted as an integral component of a worldwide political offensive to establish the International Committee of the Fourth International as the “international centre of revolutionary opposition to the resurgence of imperialist violence and militarism,” as called for in the ICFI statement of July 3 2014.

It is focused on building support for meetings in Glasgow and London and online attendance of the International May Day Rally on May 3, based on the slogans: “Down with capitalism and imperialism! Unite the working class internationally against war, dictatorship and poverty! For peace, for equality, for socialism!”

The SEP’s campaign will prove to be an important step in the development of a new revolutionary leadership in the UK and the building of the ICFI as the world party of socialist revolution.

Canada’s Conservatives pledge more austerity and war

By Keith Jones
April 24, 2015
World Socialist Web Site


Stephen-HarperCanada’s Conservative government tabled its pre-election budget Tuesday. It is a blueprint for the continued dismantling of public services, redistribution of wealth to the most privileged sections of society, and expansion of the military and national-security apparatus.

The budget had two main audiences: Canada’s ruling big-business elite and the more privileged and reactionary sections of the middle class.

To the former, its principal constituency, the Conservatives pledged that there would be no let-up in its austerity drive and the intertwined push for ever-lower taxation of big business, the rich and super-rich. With its boasts of “strong leadership” and a “low tax plan for jobs, growth and security,” the budget also constituted an implicit pledge that once the elections are over, Stephen Harper’s nine-year-old government will press forward with unpopular “structural reforms.” Since winning a parliamentary majority in the 2011 federal election, the Conservatives have raised the retirement age to 67, slashed Employment Insurance eligibility and benefits, imposed a health-care financing “accord” that cuts tens of billions from Medicare, and effectively outlawed strikes in the federal public sector and federally administered industries.

The Conservatives’ right-wing electoral base of small businessmen and professionals, meanwhile, was rewarded with further tax cuts and tax shelters. The budget cuts the tax rate on small business to 9 percent over the next four years, in 0.5 percent increments, and it almost doubles the amount Canadians can place in Tax-Free Savings Accounts (TFSAs) annually to $10,000. The budget also reaffirms last November’s introduction of income splitting for couples with children, a measure, like the expansion of TFSAs, that is heavily skewed in favor of those with high incomes.

The Conservatives are making much of the fact that Canada is the first G-7 country to balance its annual budget since the 2008 financial crisis.

This purported “achievement” has come entirely at the expense of working people. While slashing the general corporate tax rate to 11 percent, among the lowest of any industrialized country, the Conservatives have slashed more than $14 billion per year from federal “discretionary” spending, eliminating close to 30,000 federal public service jobs and slashing services, from meat and railway inspection to Canada Parks.

As a result, federal spending as a share of the total economy is now the lowest it has been since the early 1950s, a period that predates the development, under pressure from the working class, of the welfare state.

That said, due to the rapidly deteriorating economic situation, the Conservatives have had to employ a series of accounting tricks and last-minute maneuvers to meet their long-announced goal of eliminating an annual budget deficit by the 2015-16 fiscal year. These include reducing the budget’s contingency fund from $3 billion to just $1 billion, selling the government’s shares in General Motors, once again pinching money from the Employment Insurance Fund, and backdating to last year new expenditures on veterans, among whom there has been a rash of suicides and a surge in mental and physical health problems.

In a report released last week, the Parliamentary Budget Officer warned that the collapse in oil prices and consequent slump in Canada’s economic growth means that the federal government is again threatened with a “structural” budget deficit.

The deepening world economic crisis has undoubtedly disrupted the Conservatives’ electoral agenda. While some in cabinet urged the government to respond with steep cuts in this year’s budget, Harper calculated that such action would too blatantly contradict the Conservatives’ electoral narrative, which paints them as prudent managers who have succeeded in sheltering Canadians from the worst of the world economic storm over the past seven years.

In the medium to long term, however, the emergence of a “structural deficit” will not be unwelcome news for Harper and his Conservatives. Their ever-expanding tax-cutting drive has had a double purpose: to redistribute wealth upwards; and to create perpetual fiscal pressure for further social spending cuts. Nicknamed “starving the beast,” this strategy, borrowed from the US Republican right, is aimed at providing a pretext for dismantling public services and, by systematically starving them of funds, creating a growing constituency in the middle class for privatization, especially of health care.

Tuesday’s budget did announce some new federal spending, but virtually none of it before the 2017-18 fiscal year. Moreover, new outlays on the military and national security apparatus dwarf all others.

Having exploited last October’s killings of two soldiers by disturbed individuals to introduce legislation that vastly increases the state’s coercive powers, the government is now hiking expenditure on “antiterrorism” measures, all told more than half-a-billion over the next 5 years.

Beginning in 2017 the government will increases base funding of the military by 3 percent per year, instead of the current 2 percent, resulting in a $12 billion increase over 10 years.

This is in addition to the $360 million the government is allotting this year to pay for Canada’s leading role in the new US-led war in Iraq and Syria and the more than $7 million in new money being set aside to pay for the Canadian Armed Forces’ Ukraine training mission.

With the overwhelming support of the corporate elite, the Harper government has deeply implicated Canada in all three of the major military-strategic offensives currently being mounted by the US—in the Middle East and against Russia and China. However, during the past year it has come under sharp criticism from the corporate media for curtailing military spending as part of its austerity program, after rapidly expanding it in its first five years in office. By 2011 Canada was spending more on the military in real (i.e. inflation-adjusted) terms than at any time since the end of World War II.

The budget contained two other politically significant announcements.

Finance Minister Joe Oliver said the government will bank $900 million in savings this year and hundreds of millions more in coming years as a result of cuts to federal employees’ sick-leave benefits. While claiming that the Conservatives are open to “good-faith” bargaining, Oliver declared that the government would impose its concession demands by fiat should the unions not submit to them voluntarily.

The government will increase spending on public transit infrastructure beginning in two years. But this money will only be available for projects that are Public-Private Partnerships (PPPs), i.e. are organized to enrich private investors.

Predictably, the opposition parties decried the budget. NDP and Liberal spokesmen made the obvious points that more austerity will only drive unemployment, now officially at 6.8 percent, higher and that the well-to-do will reap the lion’s share of the “savings” from the Tories’ tax measures. But they also made clear that, were they to come to power, they would leave in place the vast majority of the social spending and tax cuts implemented by the Harper government and its Liberal predecessors.

Liberal leader Justin Trudeau vaunted the Liberals’ fiscal record, a reference to the massive cuts made by the Chretien-Martin government between 1995 and 1997—cuts which are still held up as a model for capitalist governments around the world. “It’s a well-established fact,” said Trudeau, “Liberals balance budgets. Conservatives have been running deficits.” Trudeau went on to pledge a Liberal government would deliver a “fiscally responsible,” “balanced budget.”

The trade union-supported NDP is similarly committed to a “balanced budget.” It has vowed to introduce no increases in personal income taxes—even on the 1 percent, whose net incomes have swelled thanks to years of personal income and capital gains tax cuts—and only modestly increase corporate taxation.

There is massive anger in the working class against the dismantling of public services and the assault on pensions, jobless benefits, and other worker rights. But this opposition is systematically suppressed by the pro-capitalist unions. For decades, they have imposed wage cuts and other concessions, and when they can’t prevent the eruption of strikes, they isolate them and use the imposition or threat of anti-strike legislation to force a return to work. This goes hand in hand with the unions’ efforts to politically smother the working class by harnessing it the pro-austerity Liberals and NDP and, in Quebec, the Parti Quebecois.

The unions have declared that their main objective is the replacement of Harper’s Conservatives in next October’s election by a “progressive” government, that is, by a Liberal or Liberal-NDP coalition. Such a government would employ vague “left” phrases and gestures, the better to implement the ruling elite’s agenda of austerity at home and imperialist aggression and war abroad.

Greece and the dictatorship of finance capital

By Nick Beams
March 11, 2015
World Socialist Web Site


The value of every crisis, as has often been remarked, is that it strips away the outer forms of political phenomena to reveal their essential characteristics. The Greek debt crisis and the attempts of the Syriza-led government to renegotiate the terms of repayment with the European Union constitute a striking case in point.

Events since the January 25 election victory of Syriza have laid bare, once again, the essential truth established by Marxism that beneath all the paraphernalia of so-called bourgeois democracy—parliaments, elections, votes and constitutions—the capitalist state and the governments that serve it represent the dictatorship of capital.

Likewise, they have exposed the pretensions of petty-bourgeois organisations like Syriza, supported by all the pseudo-left organisations around the world, that there is some way of countering this dictatorship through radical phrase-mongering and tactical manoeuvres within the framework of bourgeois politics.

Last Sunday, in an interview with the Belgian daily De Tijd, the head of the country’s central bank and a member of the Governing Council of the European Central Bank (ECB), Luc Coene, made clear that finance capital would brook no opposition to its demands.

The will of the Greek people, who voted in their millions against the five years of mass unemployment, poverty and degradation imposed by the troika (European Union, International Monetary Fund and European Central Bank), count for nothing. The austerity policies, which have devastated the economy—output is 26 percent below where it was before 2008—destroying lives and hopes, will continue unabated.

Striking the pose of a stern school headmaster, only with a much more powerful weapon than a cane in his hand, Coene said the Greek people had been sold “false promises” and would “understand quickly” that there was not a “different way.”

He declared, “Reform is the only way. Tell me where the money should come from if the Greeks do not want to repay other European countries?”

Contained in this statement are all the lies that have accompanied the “bailout” program. There has been an ongoing propaganda campaign to portray the Greek people as lazy spongers, living off of the generosity of European governments and financial institutions and unwilling to pay their debts.

In fact, the so-called bailout was never aimed at assisting the Greek people. It has been used to bail out the European banks and hedge funds. Of the €226.7 billion in loans provided by the countries of the euro zone and the International Monetary Fund, just 11 percent has gone to directly finance Greek government spending.

The rest of the money has been used either to finance interest payments to the banks or avoid a write-down of their bad loans. The vast bulk of the money has been used in a round-robin operation, coming into Greece only to flow straight back out again into the coffers of the European banks.

The aim of this carefully contrived scheme was to ensure that any default by the Greek government would not have an adverse impact on the European banking system. As a result, the troika can now tighten its grip on the Greek people even further. As Coene put it: “If they leave the euro, it will be ten times worse for them. Ten times.”

The other big lie accompanying the bailout operation is the claim that there is “no money” and therefore the Greek people must pay. That has also been exposed.

Coene’s interview was published on the very eve of the beginning of the European Central Bank’s “quantitative easing” program, which began on Monday. Over the course of the next 18 months, the ECB will pump more than €1 trillion into the European financial system through purchases of government bonds.

There is money aplenty. But none of it will be used to finance economic expansion, new industrial or infrastructure projects, or a lessening of unemployment, which remains at more than 11 percent across the euro zone.

The hundreds of billions of euros created by the ECB to buy bonds will flow into the financial markets, enabling the banks to offload toxic assets while pushing stock prices—and the fortunes of the financial oligarchy—higher.

Meanwhile, the same institution lectures the Greek people on their duty to pay back every euro owed to the banks.

The ECB’s bond-buying and money-printing operation is being used to finance what amounts to the largest Ponzi scheme in economic history. Across Europe, government bonds are bringing historically low and even negative yields. This means that any purchaser who held a government bond until its maturity would suffer an overall loss on the transaction.

Of course, bond investors have no such intention. They are buying bonds, driving up their price and lowering their yields (the two move in an inverse relationship), in the expectation that ECB intervention will drive the price of the bonds they have acquired even higher and they will be able to make a capital gain by selling them.

As with all Ponzi schemes, the ECB operation is creating the conditions for another financial crisis. And this time, because of the direct involvement of the central banks, it has the potential to be even more serious than that which led to the devastation inflicted on the Greek and world economy. In short, the financial criminals who brought about the 2008 financial crash, none of whom has been even charged, let alone prosecuted, are preparing to do it all again.

No less graphic than the laying bare of the dictatorship of finance capital is the exposure of the class character of petty-bourgeois organisations such as Syriza. In recent weeks, an international campaign has been mounted to pass off Syriza’s total capitulation to the EU, barely one month after it came to power, as a “tactic” or clever manoeuvre to gain time and fight another day. It is nothing of the sort.

The grovelling of Syriza flows from its class character, rooted not in the working class, but in sections of the Greek bourgeoisie and wealthier sections of the middle class, which it attempted to cover over with radical sounding phrases.

Politically naïve and inexperienced people may have been fooled. If so, they should learn from the experience and correct their mistake by taking up a political struggle to expose the pseudo-left groups that continue to promote the poisonous fiction that Syriza represents a step forward for the working class.

However, those who exercise the dictatorship of finance capital were never taken in. They knew from the outset with whom and what they were dealing, and acting accordingly. So confident were they in their assessment of the bourgeois character of Syriza, they did not feel obliged to offer even a concessionary fig leaf. They demanded and received total capitulation.

The working class in Greece and internationally must draw the lessons from this bitter experience. The dictatorship of finance capital cannot be confronted, much less defeated, with a program of “left” phrases and half-measures. It must be overturned through the fight for workers’ power and the implementation of an international socialist program, starting with the expropriation of the banks and finance capital.


Greece told deeper austerity needed to secure additional loans

By Robert Stevens
March 10, 2015
World Socialist Web Site


240a4-6a00d8341d417153ef017ee3f50e8c970d-800wiEuro zone finance ministers met Monday to discuss a set of proposals from the Syriza-led Greek government based on the austerity programme both sides signed on February 20. Greece was required to submit a list of austerity measures deemed acceptable to its creditors as a precondition for receiving a pending load of €7.2 billion and any further loans.

The Eurogroup meeting ended within 90 minutes. In a clear sign that there would be no retreat from finalising an austerity package, the finance ministers agreed that “technical talks” between Greece and its main creditors, the European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF), would begin Wednesday.

Speaking at a press conference following the meeting, Eurogroup Chairman Jeroen Dijsselbloem said, “We have spent the last two weeks discussing who will meet whom, where, and in what configuration. It’s been a complete waste of time…”

The Eurogroup “needed to see signs that reforms are being implemented,” he demanded, warning that there “can be no talk about early disbursement if there is no agreement and no implementation.” The Greek government, he added, had promised the Eurogroup that it would take no unilateral actions or roll back austerity measures already adopted.

Without billions of euros being made available in loans, Greece faces default on its €320 billion foreign debt in a matter of weeks. The euro zone meeting took place amid dire warnings that Greece’s banks can no longer finance the economy due to their lack of liquidity and an ongoing flight of deposits.

Nearly €20 billion were withdrawn from the banks in January and February. There is a nearly €80 billion gap between the €135 billion available in the banks’ deposits and their loan balance, which exceeds €210 billion. The banks only have temporary access to high interest rate emergency liquidity assistance (ELA) from the ECB, which can be ended at any time.

One senior bank official told Kathimerini, “As things stand, it is simply impossible for us to finance the economy, as we can only marginally cover the cash needs of our clients.”

Last Friday, Greek Finance Minister Yanis Varoufakis submitted a letter to the Eurogroup with a list of six proposed reforms. These included hiring students and even tourists as temporary “nonprofessional” tax inspectors, vague “antibureaucracy” initiatives, and measures to raise revenue from online gambling. The letter was derided as being nowhere near adequate.

Upon taking office, Syriza began its rapid capitulation to the demands of global capital, insisting it had already agreed to 70 percent of the austerity measures in place. Addressing Syriza’s latest proposals Sunday, Dijsselbloem said, “Those absolutely won’t be accepted as the 30 percent that they wanted to replace.”

In a letter to Varoufakis, Dijsselbloem stressed that the proposals would also have to be evaluated and approved by the ECB and the IMF.

European Commission Vice President Valdis Dombrovskis rejected Greece’s letter out of hand, telling a German newspaper that “a letter here or there isn’t going to change much.”

Since the February agreement, the ECB has tightened the screws, insisting that there is no alternative to continuing with mass austerity and repayment of Greece’s mountain of debt. ECB Governing Council member Luc Coene told the Belgian daily De Tijd Saturday that Greece would have to carry out new austerity measures or face leaving the euro zone, which “will be ten times worse for them. Ten times.”

Coene declared, “I do not believe there is a radically different way… Syriza has made promises it cannot keep,” and the Greek people “will understand quickly that they were deceived by false promises.”

He threatened, “Reform is the only way… Tell me where the money should come from if the Greeks do not want reform and do not want to repay other European countries?”

In agreeing last month to an extension of the austerity agreement signed by the previous New Democracy/PASOK government, Varoufakis and Prime Minister Alexis Tsipras, the leader of Syriza, farcically claimed that they would no longer be accountable to the widely despised EU, ECB, IMF “troika,” which, they declared, would no longer be returning to Athens to monitor austerity. In fact, they had agreed to a continuation of Greece’s subordination to the troika members, merely—and with consummate cynicism—renaming them the “institutions.”

This terminological sleight of hand was the only “concession” won by the Greek government in nearly a month of negotiations.

In reality, everything is being done on the troika’s terms, as has been the case since 2010. Even the pretence of renaming the troika has been ditched, with German Finance Minister Wolfgang Schäuble purposefully using the word numerous times as he entered Monday’s meeting and other euro zone ministers, including Dijsselbloem, following suit. Far from an end to the troika’s monitoring of the Greek government in Athens, the technical talks beginning Wednesday will be held in both Brussels and Greece, Dijsselbloem told the press conference.

The response of the euro zone ministers to the Greek government reveals the ruthless character of this capitalist body. Greek voters, who elected Syriza based on the party’s election promises to end austerity, have been told their votes count for nothing. The financial aristocracy and its institutions will tolerate nothing that impedes the transfer of wealth from the poor to the rich.

The response of the ruling class to Greece’s catastrophe exposes the fraudulent perspective on which Syriza secured its election victory. Syriza claimed its agenda of negotiating a debt restructuring programme on the basis of remaining in the European Union would be persuasive to sections of the ruling elite and was the only realistic way forward. Instead, Syriza was made to grovel and capitulated in a matter of days.

The Greek government moved quickly Sunday to quash comments attributed to Varoufakis in an Italian newspaper that if Athens’ proposals were not accepted, new elections or a referendum on EU membership could be contemplated.

Even after having his letter of proposals to the Eurogroup ridiculed, Varoufakis spent the weekend attempting to shore up illusions in the EU. Forced to acknowledge that his proposal to replace Greece’s current debt with bonds linked to nominal growth had met with “silence,” he pleaded, “I’d like for Europe to understand that this would be a way of paying back more money, not less.”

While a section of the ruling elite is concerned about the impact of a “Grexit” on the stability of Europe’s fragile economy, other voices are demanding that if Greece does not carry out deeper cuts, it should be allowed to leave the euro zone. The aim is to make clear that there will be no let-up in austerity in either Greece or anywhere else in Europe.

At a recent forum of the Financial Times’ FT City Network, comprised of 50 of the City of London’s most influential financiers, asset managers and insurers, Robert Swannell, chairman of Marks and Spencer, and Stephen Hester, head of insurer RSA, described Greece’s position within the euro zone as akin to “an emperor with no clothes.”

The Financial Times noted that Hester “argued that the euro zone should take a more aggressive stance, triggering Grexit if the Greek government baulks at further reforms.” Hester said, “If Greece isn’t prepared to reform enough to stay in, I don’t think the EU should risk the knock-on political dangers of too much compromise towards Greece that could halt reform in other member states.”