Wednesday, September 08, 2010

Thoughts at lunch time

I was shopping in Volos on Monday and stopped off for lunch. The waiter heard English being spoken and started asking questions about what work was like in England and whether he could get a job. Qualified in computer programming and network design, there he was working as a waiter and saying that he had wasted the best years of his life. It was just one small indicator of life in deflationary Greece. In the meantime, Greek TV shows adverts for expensive English university accredited degrees in business studies - another costly route to a dream that will probably end in delivering coffees to ageing English tourists.

All the while, sitting at your table looking out over the Argonafton, hawkers from Africa and Asia keep trying to sell you grim religious pictures, cheap plastic toys or knock-off DVDs. God knows what they have risked to get to the promised land of the European Union. Roma children are begging in the street and ask for the unfinished pizza slices.

There it all was, amidst the comfort and prosperity of European life, a hierarchy of hope, disillusion and discontent, as seen from a pavement café in a Greek port.

In the meantime the English press have been obsessing over the Blair memoirs. All agree as to the excruciating written style:
"On that night of the 12th May, 1994, I needed that love Cherie gave me, selfishly. I devoured it to give me strength. I was an animal following my instinct, knowing I would need every ounce of emotional power to cope with what lay ahead. I was exhilarated, afraid and determined in roughly equal quantities."
Then there was Iraq, with a consensus, bordering on neurotic hatred, that the desire to bring down the regime of a brutal, mass murdering dictator and replace it with a democracy was somehow an act of unparalleled malevolence.

There was little in the coverage on Blair's social policy, other than to describe it as 'centrist' and essential to winning power. There was even less on the whole Third Way farrago, an intellectual mish-mash if ever I saw one. Few doubts were expressed about the nature of public service 'reform'. And there was nothing on the strange death of adult education, my particular obsession.

When I look at the New Labour years, what strikes me as vital is political economy. Blair was not an unsuccessful Prime Minister, but he was an unsuccessful Labour Prime Minister. Deeply attracted to fashionable nonsense (the weightless economy anyone?), the Blairite government fully accepted and accelerated the Thatcherite settlement, only moderating it through supply-side driven investment in public services. There was an easy association with wealth, privilege and a celebration of inequality, though only on 'merit' of course. And it did this at the very moment when Labour had the power and popular approval to challenge, revise and lead the country away from the prevailing neo-liberal consensus.

And all this leads to the scenes at the port. For us Europeans this isn't desperation or starvation, it isn't the hunger, disease, shortened and blighted lives of the slums of the developing world, nor is it the brutal racism directed presently against the Roma across our continent. It is a feeling of unease that things could and should be better, a nagging worry about the future, a sense of injustice at the immunity of the rich from the sacrifices now being imposed through economic austerity programmes. Lost potential, lost lives, curtailed dreams seem to be an ever present reality. Stories that highlight individual tragedies are sprinkled amongst general unease.

And when Labour bought into the political economy of Thatcherism they made themselves complicit in all this. This is the legacy awaiting the new leadership, only now they have to challenge a coalition government that Blair seems only too comfortable with. We will have to wait and see, but, like Paulie, I am not hopeful.

15 comments:

Will said...

Excellent post there Peter.

First 2 items on last nights 10 o clock news - Diamond cunt gets millions in investment banking, bankrolled by us, is resurgent. 2 - collapse of massive outsourced repairs company who should never have replaced LA direct works departments. No commentary no editorial no labour leadership candidate polemicising just fuck the fuck all.

Read this -- has some excellent lines in it
http://www.wsc.co.uk/content/view/5703/38/

Roger said...

Bang on.

But born, bred and educated a Tory all Blair ever did was defend his own class.

Brown, Prescott, Blunkett and the rest are vastly more contemptible.

Anton Deque said...

I note only that the leadership of Old Labour came from (and sent many of it's own children to) selective or private schools.

All around here Blair's 'creeping destruction of socialism' has re-built schools and hospitals and some tatty districts have received face lifts through the kind of Labour government funding of communiites which will now disappear into folklore.

The running down of part time and adult education was a mistake and should be reversed by vigourous campaigning within progressive circles. There is much else for which to fight.

Politics seems now to be much more fun again. Or am I just whining on?

DorsetDipper said...

on the subject of Greece, just wondering what you think of this

http://www.spectator.co.uk/alexmassie/6260440/michael-lewis-goes-to-greece.thtml

The Plump said...

DD, this is as I see it, and I am by no means an expert.

I read the whole piece from Vanity Fair. It is rather typical of the "naughty Greeks" line. Although the things it reports are real enough and I have no quibble with them, there is more to it than that.

In one sense the article is right. Greece should never have joined the Euro and did fiddle the books to get in. As a result, it became tied to a fiscal policy designed for the German economy – not wise. However, the reason was more about politics than interest rates. There was intense national pride and a determination to ensure that Greece was locked into the European Union. This was heavily related to the past history of dictatorship and instability. Democracy matters as part of the national identity. So this is the major fault, the piece is shallow reportage and ahistorical.

That said, the Greek state is a complete mess and corruption runs very deep. This creates a cycle of tax avoidance as there is little point paying money if it is going to be stolen. Mind you, it would still happen anyway.

Euro entry led to large scale price inflation. Wages did not follow, so the expansion in credit was a replacement for declining real wages, as elsewhere. Systemic problems will always reflect the local conditions when they emerge.

The piece talks about fiddles on salaries and gives one example of high railway salaries. However, it did not point out that overall wage levels are low and have not kept up with an escalating cost of living.

In talking about bribing doctors, it did not talk about the public health service, which is pretty good. The doctors who saved my friend’s life had not been paid for three months due to the crisis and were certainly not bribed.

Some things are not quite right, ie there is now a Land Registry, prompting an outbreak of fences round me. And I have never left a single coffee shop, without a printed till receipt in all my years travelling to Greece.

And, finally, with his determination to make Greece seem a basket case, he focuses on petty rivalries and fractiousness, of which there are plenty, and misses the main instruments of social solidarity, national and local pride and family. Greece is a relatively peaceful country with a low crime rate, it is not the richest in Europe, but it is no Third World country. A big difference with the UK is that people fight back when their interests are attacked, just like in France. It certainly is idiosyncratic and part of that idiosyncrasy is deeply dysfunctional, but this is not the whole story.

DorsetDipper said...

thanks for that comprehensive response Peter. I suspected the author had concentrated on comedy rather than balance, and your reply confirms that.

DorsetDipper said...

Will - small picky point but Barclay's did not get any government bailout.

John said...

Peter: your post is the truth well written.

We have a very similar economic/social climate in the states now with the oligarchs and their minions fully on-message, convincing many potential voters that progressives are responsible for the troubles. They're truly amazing.

They're smart enough to know they don't need to be all that smart. A red-hot branding iron will do.

Overtired and emotional said...

Europe and the US, and, perhaps, elsewhere, face a crisis which has nothing to do with public expenditure, capitalism or the markets. It is to do with financial institutions and their relationship with governments.

These institutions have largely bought the political class both by funding political parties and providing sinecures for the retired (such as T Blair and J Major).

We are told that it would be a huge mistake to divide retail and investment banking, but I have yet to see precisely why. The world worked well enough, world wars apart, for the fifty odd years that they were separated in the US and here.

Yes, the rich were rich and the poor were poor, but it worked.

The reality is that the USA can contemplate fighting wars anywhere and against anyone, but it cannot face down a few hundred people based in Wall Street. Elsewhere, the same principle obtains.

This come close to sounding like a conspiracy theory, but we, that is, eveyone, have to decide who is in charge. Us or them?

DorsetDipper said...

overtired and emotional says the cause of the problems was the relationship between financial institutions and government, and suggests investment banking and retail banking should be split.

I work in the international markets for banks, and agree on both counts. Many participants behaved as if there was implicit government backing for banks, and that turned out to be the case for a number of institutions.

From now on the government should be absolutely clear what's in the fence and what's outside. I'd suggest Deposits at BOE rates are in, and everything else is outside.

Will said...

in Greece -- creating a state of emergency in order to engineer support for a qualitative, lasting change in the social fabric, a "neoliberal purge" that is. If the Left and the popular forces in Greece are unable to meet this challenge, "they will be swept away by the dislocation of social relations and the rise of despair and, probably, of the most reactionary and regressive tendencies within society"."

http://mrzine.monthlyreview.org/2010/kouvelakis260810.html

DorsetDipper said...

Think people of the left should beware the trap of supporting the Greek public sector. The primary victims of the kind of corrupt nonsense of the Greek state are workers whos skills are undermined by the debasing of money. Just because people on the Right are against something doesn't mean people on the Left should be for it.

Roger said...

Peter - an interesting article by Henry Farrell on the wider EU and global context of teh Greek (and Irish) austerity programme:

http://democracyjournal.org/article.php?ID=6773

'But austerity measures will not lead to economic stability. They will never be applied to strong member states, and will fail to address the problems of weaker ones, which are more likely to face problems of overheating in the private sector than over-reliance on public borrowing. They are also extremely crude, and would provide little flexibility for states faced with asymmetric shocks. Most importantly, the emphasis of austerity hawks on fiscal rectitude and nothing but is not politically sustainable. They would reproduce the problems of the early twentieth-century “gold standard” system, in which economies responded to crises with chopped wages and swingeing increases in unemployment. As Barry Eichengreen has emphasized, democracies cannot credibly maintain such a system over the long run. European citizens are suspicious of the EU because they do not understand it. If they come to see it as a set of shackles chaining them in economic squalor and misery, their suspicion will be transformed into positive detestation. EMU cannot survive widespread public loathing. Yet such loathing would be the ineluctable result of enforced austerity programs.

Austerity also would have international repercussions. If European economies are compelled to impose austerity, they cannot grow through increased domestic spending. Instead, they will have to look to increased exports, copying Germany’s path to prosperity. Unfortunately, the world economy cannot accommodate 26 little Germanys. The current imbalance between the United States–as a net importer and borrower–and exporters such as China already poses a grave risk to international economic stability. If Europe dampens domestic demand and simultaneously looks to increase exports substantially, it will make this imbalance much worse. European deficit hawks assume that the United States will continue to act as importer of last resort. But the United States cannot go on borrowing money to finance domestic consumption forever. Unless it starts gradually to unwind its position, the United States–not to mention the global economy–faces a dramatic collapse'.

Leviathan said...

Peter - an interesting article by Henry Farrell on the wider EU and global context of teh Greek (and Irish) austerity programme:

http://democracyjournal.org/article.php?ID=6773

'But austerity measures will not lead to economic stability. They will never be applied to strong member states, and will fail to address the problems of weaker ones, which are more likely to face problems of overheating in the private sector than over-reliance on public borrowing. They are also extremely crude, and would provide little flexibility for states faced with asymmetric shocks. Most importantly, the emphasis of austerity hawks on fiscal rectitude and nothing but is not politically sustainable. They would reproduce the problems of the early twentieth-century “gold standard” system, in which economies responded to crises with chopped wages and swingeing increases in unemployment. As Barry Eichengreen has emphasized, democracies cannot credibly maintain such a system over the long run. European citizens are suspicious of the EU because they do not understand it. If they come to see it as a set of shackles chaining them in economic squalor and misery, their suspicion will be transformed into positive detestation. EMU cannot survive widespread public loathing. Yet such loathing would be the ineluctable result of enforced austerity programs.

Austerity also would have international repercussions. If European economies are compelled to impose austerity, they cannot grow through increased domestic spending. Instead, they will have to look to increased exports, copying Germany’s path to prosperity. Unfortunately, the world economy cannot accommodate 26 little Germanys. The current imbalance between the United States–as a net importer and borrower–and exporters such as China already poses a grave risk to international economic stability. If Europe dampens domestic demand and simultaneously looks to increase exports substantially, it will make this imbalance much worse. European deficit hawks assume that the United States will continue to act as importer of last resort. But the United States cannot go on borrowing money to finance domestic consumption forever. Unless it starts gradually to unwind its position, the United States–not to mention the global economy–faces a dramatic collapse'.

DorsetDipper said...

spot on Leviathan.

That's why floating exchange rates are a good idea, and the euro isn't.