We’ve lived so long under the spell of hierarchy—from god-kings to feudal lords to party bosses—that only recently have we awakened to see not only that “regular” citizens have the capacity for self-governance, but that without their engagement our huge global crises cannot be addressed. The changes needed for human society simply to survive, let alone thrive, are so profound that the only way we will move toward them is if we ourselves, regular citizens, feel meaningful ownership of solutions through direct engagement. Our problems are too big, interrelated, and pervasive to yield to directives from on high.
—Frances Moore Lappé, excerpt from Time for Progressives to Grow Up

Saturday, June 16, 2012

Austerity Kills: How the EuroCrisis is Being Used to Break the Social Contract

Click here to access article by Yves Smith from Naked Capitalism.

Yves Smith's introduction to the Real News interview (access transcript here) with Rob Johnson of the liberal capitalist think tank, Roosevelt Institute, provides an excellent concrete description of how the machinations of capitalist elites are affecting the lives of real ordinary people. Johnson is only able to think and express himself in broad, abstract economic terms which Paul Jay occasionally translates into human terms. Nevertheless, Johnson does offer some illuminating insights such as this:
European adjustments are not the product of a mistake, but in fact they're the product of a vision or design among some, what you might call the elites in Europe, that a single market is needed to break down some of the leftover architecture of the Cold War, which [incompr.] might be called the insurance premium that was paid against conversion to communism.
The state structure that [incompr.] livelihood-supporting structure that was part of Southern European civilization, particularly in the Catholic nations, is now being destroyed. I don't think that's happening coincidentally or randomly. I think that is part of design that the single market was supposed to achieve. It's not happening slowly. It's happening on the grounds that we can't afford it, probably happening because Central Europe, former Eastern European countries, and Asia are all low-cost production centers, and the German manufacturer is no longer interested in foreign direct investment in Southern Europe with these social conditions when he can go into Asia or Central Europe and probably operate for two-thirds or half the cost.
I'd like to summarize this in my own terms. When capitalist ruling classes through their operations caused a severe economic collapse in the 1930s that ended up in the WWII conflagration together with the competition from a powerful Soviet Union which offered extensive social safety programs and an alternative economic arrangement, European elites were essentially forced to install elaborate social safety nets after WWII. This arrangement has been referred to as "social democracy". (Notice how the governing One Percents love to dress up their rule with the word "democracy".)

Today, of course, European elites no longer need these expensive programs to maintain social stability. They want to appropriate this wealth that is being "wasted" on their wage slaves. Also, there is all the cheap labor available elsewhere in the world to exploit.

In recent years we have seen how these elites through their dysfunctional capitalist operations have once again caused major dislocations in the economy characterized by a concentration of wealth at the top and widespread poverty below. However, this time I think that there is a major new factor that is complicating the picture.

Capitalist ruling elites have heretofore been able to maneuver around these crises by engaging in destructive wars or by growing their economies and trickling down sufficient benefits to their wage slaves to keep social order to keep the latter from inciting a revolution. The few attempts at revolution that resulted in the Soviet Union and China was enough to scare the pants off the capitalist elites. Fortunately, for the latter, these two experiments merely established new types of ruling classes--bureaucratic ones. They did not eliminate ruling classes as promised.

The new major factor? Briefly, the limits that this growth-required system is coming up against: the exhaustion of fossil fuels and other resources, and ecosystem limits. They are becoming aware that they can no longer grow their economies out of economic crises. One result is what we are witnessing today: the growing impoverishment of the 99 Percent and the formation of police forces to keep them under control. Another is a more unthinkable alternative--major wars--is also a frightening possibility which the Empire seems prepared to instigate.