From the new July-August 2011 issue of News & Letters:
Since May 25, a people’s assembly has been in session in Greece’s Syntagma Square outside of parliament. (See “Greece: Tahrir Squared”.) Through an open mike, tens of thousands from all walks of life have been coming to express their total indignation with Europe’s politics of austerity. The people’s assembly of self-described “angry ones” is a new dimension to the ongoing mass strikes by workers and battles carried on against the police by anarchist youth. After a year of massive cuts to wages, pensions and benefits, as well as tax increases, Greek unemployment has grown to a record 16%. Now the IMF, European Central Bank and political leaders in Germany and France are demanding another 40 billion euros in cutbacks.
A pensioner, Apostolos Anagnostopoulos, spoke for many of the world’s workers who have become collateral damage in the wake of the 2008 global financial meltdown: “Greeks aren’t willing to pauperize themselves to pay off debt for which they are not to blame. We are in revolt, people may be killed, but whatever it takes we are not going to let those measures pass.”
Europe has been rife with persistent revolts, mass strikes, marches against economic retrenchment for some time. When the Arab Spring emerged against political repression and economic deprivation, it resonated in Europe in a new “Take the Square” movement which began during the run-up to May 20 elections in Spain with a demand for “Real Democracy.”
Saved through a no-holds-barred robbing of public treasuries in the wake of the 2008 financial meltdown, financial overlords are now dictating that workers pay for bloated public debts through drastic cuts to their conditions of life and labor. Forced deficit reduction is also shrinking the economies of Ireland, Portugal and Spain, making those countries’ debt burdens even more unbearable and further crises inevitable. What spooks the global financial system is that the spiraling debt crisis, which they themselves are driving, will result in defaults on debt obligations throughout the world.
OBAMA’S POLITICAL PARALYSIS
That is why President Obama begged the German Chancellor Angela Merkel, who has been insisting on punishing conditions for rescue loans, to resolve the Greek crisis as he entertained her at the White House. The fear is that the whole global economy, including Germany and the U.S., will go into the abyss in a “Lehman Brothers 2,” referring to the investment bank whose collapse precipitated the 2008 financial meltdown.
In the U.S. the fallout from the 2008 financial meltdown persists. Long-term unemployment included in the official U.S. unemployment rate of 9.1% announced on June 3 is the highest since the Great Depression. Last year Obama denounced any idea that this intractable, permanent level of unemployment should be accepted as “the new normal,” yet now the whole political agenda has turned to deficit reduction, with Republicans threatening a self-induced debt default crisis, unless they can punish U.S. workers with more cuts.
Obama fervently believes in political solutions to the crisis, but political practice has been reduced, not just to begging the German chancellor not to push the world economy into another crash, but also to a “jobs” program of begging U.S. businesses to “get in the game” instead of sitting on their cash hoard of $1.9 trillion.
The problem is that capital is on strike and won’t invest in the real economy, where the financial meltdown revealed a dramatically lower rate of profit.
CAPITALISM’S FALLING RATE OF PROFIT
Profit can only come from surplus value extracted from living labor, and the rate of profit falls when there is relatively less living labor in proportion to dead labor or capital. Capital’s self-contradictory motivation is to diminish as much as possible living labor–this goose that lays their golden eggs–by constantly revolutionizing production with new dead labor or machines.
With a given level of technological development and ratio of capital to living labor, the only way to boost profit is to lower the cost of labor through a class war on labor rights, wages, benefits and pensions. There are now reports that some manufacturing may return to the U.S., where there are fewer strikes and production costs keep dropping so precipitously that they will compare favorably with China by 2015. Notably, that will be true only by Mississippi standards, the lowest paid anti-union environment for sweated labor in the country.
In contrast to total economic crisis and political paralysis, the new people’s assemblies that have emerged look for solutions outside the prevailing players like political parties and trade unions. In the public squares of Spain and Greece, masses are organizing their lives together, inspired by the persistent self-organization of Egyptians in Tahrir Square that got rid of the Mubarak regime. This self-organization offers a new vantage point, not just against past political and economic tyranny, but towards a totally new future of freely associated labor.