Sent time:   Tuesday, November 01, 2011 12:37:02 PM
Subject:   SPAM-MED: Re: [september17discuss] Greek government on verge of collapse over austerity referendum

Immanuel Wallerstein gives a pretty good explanation as to why social

democracy, what was called the New Deal in the US, won't be a viable way

forward anymore. It can be found here (and pasted in below):


The financial crisis has become an economic crisis, which is now a

political crisis in Greece... and increasingly so even here in the US.

It's exciting that the neoliberal order is falling but it's also scary

because we need to have effective and liberatory economic and political

responses, what some might call "alternatives".


Authoritarian forces will be much more likely to succeed in setting the

new rules of the game if we fail to find ways to meet our own needs in

just, democratic and ecologically sustainable ways. As far away as it may

seem, I don't think it could hurt in these times for us to get serious

about what it might mean to win... and to think through what we need to do

today, next week, and next year to be in a position to collectively

control our own lives and destinies. A lot of us are already doing this,

and it also feels important to remind us of that given the crisis of

alternatives facing even the most democratic forces in Greece right now.




Immanuel Wallerstein » Commentaries

The Social-Democratic Illusion

Commentary No. 313, September 15, 2011


Social-democracy had its apogee in the period 1945 to the late 1960s. At

that time, it represented an ideology and a movement that stood for the

use of state resources to ensure some redistribution to the majority of

the population in various concrete ways: expansion of educational and

health facilities; guarantees of lifelong income levels by programs to

support the needs of the non-”wage-employed” groups, particularly children

and seniors; and programs to minimize unemployment. Social-democracy

promised an ever-better future for future generations, a sort of permanent

rising level of national and family incomes. This was called the welfare

state. It was an ideology that reflected the view that capitalism could be

“reformed” and acquire a more human face.


The Social-Democrats were most powerful in western Europe, Great Britain,

Australia and New Zealand, Canada, and the United States (where they were

called New Deal Democrats) – in short, in the wealthy countries of the

world-system, those that constituted what might be called the pan-European

world. They were so successful that their right-of-center opponents also

endorsed the concept of the welfare state, trying merely to reduce its

costs and extent. In the rest of the world, the states tried to jump onto

this bandwagon by projects of national “development.”


Social-democracy was a highly successful program during this period. It

was sustained by two realities of the times: the incredible expansion of

the world-economy, which created the resources that made the

redistribution possible; and United States hegemony in the world-system,

which ensured the relative stability of the world-system, and especially

the absence of serious violence within this wealthy zone.


This rosy picture did not last. The two realities came to an end. The

world-economy stopped expanding and entered into a long stagnation, in

which we are still living; and the United States began its long, if slow,

decline as a hegemonic power. Both new realities have accelerated

considerably in the twenty-first century.


The new era beginning in the 1970s saw the end of the world centrist

consensus on the virtues of the welfare state and state-managed

“development.” It was replaced by a new, more rightwing ideology, called

variously neo-liberalism or the Washington Consensus, which preached the

merits of reliance on markets rather than on governments. This program was

said to be based on a supposedly new reality of “globalization” to which

“there was no alternative.”


Implementing neo-liberal programs seemed to maintain rising levels of

“growth” on stock markets but at the same time led to rising worldwide

levels of indebtedness, unemployment, and lower real income levels for the

vast majority of the world’s populations. Nonetheless, the parties that

had been the mainstays of the left-of-center social-democratic programs

moved steadily to the right, eschewing or playing down support for the

welfare state and accepting that the role of reformist governments had to

be reduced considerably.


While the negative effects on the majority of the populations were felt

even within the wealthy pan-European world, they were felt even more

acutely in the rest of the world. What were their governments to do? They

began to take advantage of the relative economic and geopolitical decline

of the United States (and more widely of the pan-European world) by

focusing on their own national “development.” They used the power of their

state apparatuses and their overall lower costs of production to become

“emerging” nations. The more “left” their verbiage and even their

political commitment, the more they were determined to “develop.”


Will this work for them as it had once worked for the pan-European world

in the post-1945 period? It is far from obvious that it can, despite the

remarkable “growth” rates of some of these countries – particularly, the

so-called BRICs (Brazil, Russia, India, China) – in the last five to ten

years. For there are some serious differences between the current state of

the world-system and that of the immediate post-1945 period.


One, the real cost levels of production, despite neoliberal efforts to

reduce them, are in fact now considerably higher than they were in the

post-1945 period, and threaten the real possibilities of capital

accumulation. This makes capitalism as a system less attractive to

capitalists, the most perceptive of whom are searching for alternative

ways to secure their privileges.


Two, the ability of the emerging nations to increase in the short run

their acquisition of wealth has put a great strain on the availability of

resources to provide their needs. It therefore has created an ever-growing

race for land acquisition, water, food, and energy resources, which is not

only leading to fierce struggles but is in turn also reducing the

worldwide ability of capitalists to accumulate capital.


Three, the enormous expansion of capitalist production has created at last

a serious strain on the world’s ecology, such that the world has entered

into a climate crisis, whose consequences threaten the quality of life

throughout the world. It has also fostered a movement for reconsidering

fundamentally the virtues of “growth” and “development” as economic

objectives. This growing demand for a different “civilizational”

perspective is what is being called in Latin America the movement for

“buen vivir” (a liveable world).


Four, the demands of subordinate groups for a real degree of participation

in the decision-making processes of the world has come to be directed not

only at “capitalists” but also at the “left” governments that are

promoting national “development.”


Fifth, the combination of all these factors, plus the visible decline of

the erstwhile hegemonic power, has created a climate of constant and

radical fluctuations in both the world-economy and the geopolitical

situation, which has had the result of paralyzing both the world’s

entrepreneurs and the world’s governments. The degree of uncertainty – not

only long-term but also the very short-term – has escalated markedly, and

with it the real level of violence.


The social-democratic solution has become an illusion. The question is

what will replace it for the vast majority of the world’s populations.


> "unpopular austerity measures"


> This does not seem like "New Deal" measures to me. This seems like the

> opposite of that, and the opposite of what Keynes would prescribe during

> an

> economic slowdown. Is there something not in the article I'm missing?


> --glj


> On Tue, Nov 1, 2011 at 1:12 PM, shaista husain

> <>wrote:


>> Thanks for posting this,

>> The social democratic leadership PASOK party have sold out to the

>> Troika and Greece really is on the brink of a revolution--it is also

>> the weakest link in Europe. It is important that we understand why

>> social democracy and why this Third Party has not been able to

>> implement reform and structural changes for the people. Greece poses

>> an interesting lesson--and those of us who think similar keynesian

>> "New Deal" steps are a solution to our problem (*yes anything is

>> better than what we have now*!!!!) but these "New Deal" policies are

>> being rejected by the Greek workers, as these measures have not been

>> able solve the economic crisis. What are the people of Greece

>> demanding?



>> On Tue, Nov 1, 2011 at 11:01 AM, Doug Singsen <>

>> wrote:

>> >


>> >

>> > Government in Greece Nears Collapse Over Referendum

>> >


>> >

>> > ATHENS — The Greek government was plunged into chaos on Tuesday and

>> faced an

>> > imminent collapse, as lawmakers rebelled against Prime Minister George

>> > Papandreou’s surprise call for a popular referendum on a new debt deal

>> with

>> > Greece’s foreign lenders.

>> >

>> > Power company customers lined up in Athens on Monday to ask about a

>> new

>> tax.

>> > President George A. Papandreou’s surprise promise of a vote on

>> austerity

>> > measures threatens a deal reached to ease the European debt crisis.

>> >

>> > Such a collapse would not only render the referendum plan moot, it

>> would

>> > likely scuttle — or at least delay — the debt deal that was agreed on

>> in

>> > Brussels last week, putting Greece on a fast track to default and

>> possible

>> > exit from the monetary union of countries sharing the euro currency.

>> >

>> > Analysts said that Mr. Papandreou’s call for a referendum was a last

>> resort,

>> > meant to gain broader political support for the unpopular austerity

>> measures

>> > in the deal without forcing early elections that would only worsen the

>> > country’s political and economic turmoil.

>> >

>> > But after weeks of mounting pressure, one Socialist lawmaker quit the

>> party

>> > to become an independent, reducing Mr. Papandreou’s majority to 152

>> seats

>> > out of 300 in Parliament, and another six Socialists wrote a letter

>> calling

>> > on Mr. Papandreou to resign and schedule early elections for a new

>> > government with greater political legitimacy. Together, the

>> developments

>> > made it doubtful whether his government would survive a confidence

>> vote

>> > planned for Friday.

>> >

>> > Meanwhile, the center-right opposition New Democracy party on Tuesday

>> > stepped up its calls for early elections. Its leader, Antonis Samaras,

>> has

>> > opposed most of the austerity measures the government accepted in

>> exchange

>> > for foreign financial aid. Mr. Samaras has said that if he were in

>> power, he

>> > would try to renegotiate the terms of Greece’s arrangement with its

>> > principal foreign lenders, known as the troika: the European Union,

>> the

>> > European Central Bank and the International Monetary Fund.

>> >

>> > “Mr. Papandreou, in his effort to save himself, has presented a

>> divisive

>> and

>> > extortionate dilemma,” Mr. Samaras said on Tuesday. “New Democracy is

>> > determined to avert, at all costs, such reckless adventurism.”

>> >

>> > Mr. Samaras declined to say whether he would ask his 85 members of

>> > Parliament to resign, a move that would lead to the dissolution of

>> > Parliament and a snap election. The next general election was not due

>> until

>> > 2013, when the Socialists’ four-year-term expires. Mr. Samaras is

>> expected

>> > to clarify his stance at a meeting of his party’s parliamentary group

>> on

>> > Wednesday.

>> >

>> > European leaders have repeatedly dismissed Mr. Samaras’s notion of

>> > renegotiating Greece’s deal with its lenders, saying that trying to do

>> so

>> > would be damaging and would throw away months of work on a plan to

>> keep

>> > Greece from defaulting.

>> >

>> > Mr. Papandreou’s announcement of a referendum took Greek lawmakers by

>> > surprise, just a s it did political leaders and investors across

>> Europe.

>> On

>> > Tuesday, the state television channel Net reported that even the

>> finance

>> > minister, Evangelos Venizelos, had not been informed in advance about

>> the

>> > referendum, although he was aware of plans for a confidence vote.

>> >

>> > Mr. Venizelos was taken to a hospital Tuesday morning, complaining of

>> > stomach pain. Doctors said he had an inflamed appendix. He is the

>> latest

>> in

>> > a string of governing party officials to be rushed to hospitals in

>> recent

>> > weeks. One Greek negotiator had a heart attack in Brussels last week.

>> >

>> > On Tuesday, European leaders said the deal reached last week to write

>> down

>> > 50 percent of some Greek debt was the best available way to build a

>> > financial “firewall” that would keep Greece’s troubles from causing a

>> > damaging run on other shaky European economies like that of Italy.

>> >

>> > The political instability in Greece has long dismayed European

>> officials. In

>> > a statement, the president of the European Commission, Jose Manuel

>> Barroso,

>> > and the president of the European Council, Herman Van Rompuy, said

>> that

>> > Europe’s plans to protect other vulnerable members were “more

>> necessary

>> than

>> > ever, without delay.”

>> >

>> > “We are convinced that this agreement is the best for Greece,” they

>> added.

>> > “We fully trust that Greece will honor the commitments undertaken in

>> > relation to the euro area and the international community.”

>> >

>> > In Greece, Mr. Papandreou’s referendum proposal seemed to be his last,

>> best

>> > hope. His political capital has dried up, and he faces intense anger

>> from

>> > voters who have been squeezed to the breaking point by the austerity

>> > measures demanded by Greece’s foreign lenders.

>> >

>> > “Papandreou could not take more political punishment,” said George

>> Kirsos, a

>> > political analyst and the owner of the Athens City Paper. “We have a

>> strange

>> > situation: Everyone’s cursing the government, and everyone expects the

>> > government to do the job by itself — to reorganize the economy, to cut

>> the

>> > deficit, to make a deal with the Germans — but at the same time,

>> nobody

>> > helps him.”

>> >

>> > “All parties and all media criticize the government,” Mr. Kirstos

>> added.

>> “So

>> > Papandreou, in a sense, tried his best to do the referendum to force

>> the

>> > parties, the media and the citizens to undertake their own

>> responsibility.

>> > The referendum is a yes or no issue: Either you are in favor, or you

>> decide

>> > that you say goodbye to the euro zone.”

>> >

>> > Charged by Europe with dismantling the welfare state they helped

>> create,

>> > many of Mr. Papandreou’s Socialist members of Parliament feel they too

>> have

>> > reached their breaking points.

>> >

>> > Vasso Papandreou, a prominent member of parliament and a former

>> minister

>> who

>> > is not related to the prime minister, called on Greek President

>> Karolos

>> > Papoulias to order the formation of a unity government ahead of early

>> > general elections. “Bankruptcy is imminent,” she said. Earlier this

>> month,

>> > Ms. Papandreou said she would vote for a new raft of austerity

>> measures,

>> but

>> > that it would be “the last time” she supported the government

>> > unconditionally.

>> >

>> > “The current government has none of these necessary prerequisites.

>> Today’s

>> > government policy is asphyxiating. Day by day the country is

>> experiencing

>> > collapse, lawlessness and absence of government,” they added.

>> >

>> > If Mr. Papandreou’s government falls, it would not be the first one in

>> > Europe to be toppled by the austerity demanded by European debt

>> relief.

>> In

>> > Ireland and Portuga,l governments that accepted bailouts from the

>> European

>> > Union and the International Monetary Fund fell, and last month the

>> Slovakian

>> > government fell over whether to participate in the European Union’s

>> rescue

>> > package.

>> >

>> > Niki Kitsantonis reported from Athens and Rachel Donadio from Rome.

>> Stephen

>> > Castle contributed reporting from Brussels.