Reactionary economics is a kind of war-making

Michael Hudson provides a brief case study of this kind of war craft while describing the Greek crisis:

The fight for Europe’s future is being waged in Athens and other Greek cities to resist financial demands that are the 21^st century’s version of an outright military attack. The threat of bank overlordship is not the kind of economy-killing policy that affords opportunities for heroism in armed battle, to be sure. Destructive financial policies are more like an exercise in the banality of evil — in this case, the pro-creditor assumptions of the European Central Bank (ECB), EU and IMF (egged on by the U.S. Treasury).

As Vladimir Putin pointed out some years ago, the neoliberal reforms put in Boris Yeltsin’s hands by the Harvard Boys in the 1990s caused Russia to suffer lower birth rates, shortening life spans and emigration — the greatest loss in population growth since World War II. Capital flight is another consequence of financial austerity. The ECB’s proposed “solution” to Greece’s debt problem is thus self-defeating. It only buys time for the ECB to take on yet more Greek government debt, leaving all EU taxpayers to get the bill. It is to avoid this shift of bank losses onto taxpayers that Angela Merkel in Germany has insisted that private bondholders must absorb some of the loss resulting from their bad investments.

Popular protest in Greece

The bankers are trying to get a windfall by using the debt hammer to achieve what warfare did in times past. They are demanding privatization of public assets (on credit, with tax deductibility for interest so as to leave more cash flow to pay the bankers). This transfer of land, public utilities and interest as financial booty and tribute to creditor economies is what makes financial austerity like war in its effect.

I am sure it is difficult to produce a Hollywood epic of Greek farmers struggling to survive a blow that begins and ends with a stroke of a pen.

I also do not believe it wrong to identify this kind of elite economic activity as a kind of primitive or original accumulation. I believe it is uncontroversial to assert that the European Bankers and their allies in the United States want to restructure the Greek economy in order to exclude some in Greece from the material benefits they have had in the past and to accumulate capital by exploiting the political, legal and economic conditions in Greece, Europe and the world at large. This manner of capital accumulation may rightly be characterized as a kind of looting, that is, as an expropriation meant, in part, to change the character of economic exploitation in Greece. It is an instance of primitive or original accumulation because it will likely end with a new economic regime in Greece, a regime that will reflect the political capacities and economic requirements of some finance capitalists.

Hudson gives this advice to the Greek people who have been excluded from the elite bargaining over Greece’s future:

The most effective tactic is to demand a national referendum on whether to accept the ECB’s terms for austerity, tax increases, public spending cutbacks and selloffs. This is how Iceland’s president stopped his country’s Social Democratic leadership from committing the economy to ruinous (and legally unnecessary) payments to Gordon Brown’s Labour Party demands and those of the Dutch for the Icesave and even the Kaupthing bailouts.

Use of the direct democratic mechanism is the best feasible and effective path to block this attack on Greece and its people. Revolution is the only rational alternative to the victims of this looting effort if the institutions of a modern democracy were to fail to secure the rights and well-being of the Greek people. Resignation and suffering combine to provide the irrational alternative.

Related articles

• ANALYSIS: Greek debt will be paid, but by who? (cbc.ca)
• Austerity in Greece Meant to Break Workers’ Resistance + Thousands of Greeks Say No to Austerity (dandelionsalad.wordpress.com)
• Greek People and Parliament Score Historical Victory Against Authoritarian Imf/eu/ecb (birdflu666.wordpress.com)