July 14, 2015

How has democracy fared in the place where it was supposedly born? Not well, writes Danny Katch , author of Socialism...Seriously: A Brief Guide to Human Liberation .

ANCIENT GREECE is said to have introduced democracy to the world some 2,500 years ago. Now the world is trying to show modern Greece that it's been wrong all along.

Last January, when the Greeks elected the radical left party SYRIZA into power, with its platform of resisting the devastating austerity pushed by the authorities in Europe, they were portrayed by international political and business elites as foolishly attempting to resist the natural laws of capitalism.

As is so often the case in our world, we were meant to view the crisis in Greece in purely economic terms of debt repayment, rather than raise democratic questions about who decides which debts are paid and by whom--or whether some project is worth going into debt for in the first place, for that matter.

What SYRIZA's election did was to expose the bankers' laws and rules as not natural at all--a dangerous message for which Europe's leaders seem determined to punish both the party and the people who elected it with economic devastation for decades to come.

German Finance Minister Wolfgang Schäuble (right) with another Eurogroup minister who dictated austerity to Greece

IT'S IMPORTANT to clarify from the beginning that Greece's debt crisis didn't come about because millions of Greeks borrowed money from their buddies across Europe, bought a bunch of nice stuff with it, and then refused to pay back their hardworking friends abroad.

Rather, the bankers in Germany, France and other powerful countries made lots of loans and investments--some solid, some shady--in many smaller countries until enough of the shady bank loans triggered a global financial crisis in 2008. Greece was the country in Europe with the biggest debt in relationship to the country's gross domestic product--though it wasn't number one by that much.

On its own, Greece's debt was actually quite manageable, but as Mark Blyth explained in Foreign Affairs, the bankers feared it could be the loose thread that unraveled a much larger web of financial lies across the continent:

The Greek deficit [in 2010] was a rounding error, not a reason to panic. Unless, of course, the folks holding Greek debts, those big banks in the eurozone core, had, over the prior decade, grown to twice the size (in terms of assets) of--and with operational leverage ratios (assets divided by liabilities) twice as high as--their "too big to fail" American counterparts, which they had done. In such an over-leveraged world, if Greece defaulted, those banks would need to sell other similar sovereign assets to cover the losses. But all those sell contracts hitting the market at once would trigger a bank run throughout the bond markets of the eurozone that could wipe out core European banks.

In other words, for the past five years, the rich bankers of Europe have been attempting to appease the gods of capital by offering up the ordinary people of Greece as a human sacrifice. Wages are down 20 percent while taxes have risen by seven times--all in return for billions of dollars in bailouts that mostly go straight to mostly French and German banks.

SYRIZA won a historic election in January--a meteoric rise for what was a small left electoral coalition only a few years before--because it promised to reject this brutal program of austerity.

But the party leadership around Prime Minister Alexis Tsipras quickly turned its attention to talks with the European lenders, under the mistaken impression that the strong mandate they had been given by Greek voters would somehow impress European capitalists--rather than enrage them.

Like clever foxes negotiating with a concrete wall, Tsipras and his Finance Minister Yanis Varoufakis made concession after concession on SYRIZA's campaign promises, waiting in vain for Germany and the European and international financial institutions--known as the "troika"--to meet them halfway.

Then at the end of June, something remarkable happened. Desperate to change the terms of the game, Tsipras announced that he would ask the Greek people to vote for or against the latest EU proposals for austerity in a national referendum on July 5.

All the country's political forces mobilized--for the first time since the national election five months before, millions of Greeks would have a say in their own fate--were they for or against the austerity measures. When 61 percent voted "Oxi!" ("No!"), it was a decisive call for SYRIZA to continue--or restart--the fight against austerity.

The Greek referendum was a startling moment for people around the world as well, a glimpse of what something approaching actual democracy looks like, instead of the typical capitalist version of voting once in a while for which face you want to be getting the bad news from for the next few years.

Among ruling class circles in Europe, the reaction to Oxi! was rage. Tsipras had "torn down the last bridges over which Europe and Greece might have been able to move toward a compromise," said Germany's deputy chancellor (and leader of the Social Democrats) Sigmar Gabriel, with his "rejection of the rules of the game of the eurozone."

That's right. Just like an exclusive country club that posts multiple signs forbidding running, diving or splashing in the pool area, the eurozone tried to erect a "No voting" sign across the continent. It was a variation on the same message delivered ever since the people of France and the Netherlands decisively voted down a proposed European Constitution in 2005.

That inconvenience forced European rulers to go to the trouble of rewriting the Constitution as the Treaty of Lisbon, which they claimed was merely a revision of previous European treaties and therefore not subject to popular vote.

The referendum called by Tsipras was nonbinding--as later events would depressingly prove--but it nonetheless showed the explosive power of democracy, bringing to mind the truth of Frederick Engels' observation in The Origin of Family, Private Property and the State:

Universal suffrage is thus the gauge of the maturity of the working class. It cannot and never will be anything more in the modern state, but that is enough. On the day when the thermometer of universal suffrage shows boiling point among the workers, they as well as the capitalists will know where they stand.

ENGELS' POINT was that while democracy is both a tool and an aim for socialists, capitalism is a fundamentally undemocratic economic order that can't be elected out of existence, but will need to be overthrown by workers acting above and beyond the ballot box.

Alexis Tsipras and his co-thinkers in the SYRIZA leadership are committed to different version of socialism, based on the strategy of gradually winning national power through parliament--and more recently, winning continental power via the European Union.

That's why almost immediately after the referendum, Tsipras announced that he was going back to negotiations and was willing to accept most of the harsh measures that Greeks had just decisively voted down in the referendum that he had called.

In effect, Tsipras decided to use the mass democracy of Oxi! as a bargaining chip in negotiations to try to remain in the far less democratic club of the European Union.

The EU responded to the referendum as it did to SYRIZA's election in January, calling for even harsher austerity measures--including forcing the Greek parliament to pass a series of laws undoing every SYRIZA promise and demanding that 50 billion euros in Greek assets be turned over to a fund controlled by EU.

Varoufakis, who had been forced to step down as finance minister, compared these demands to the 1967 military coup that installed a military dictatorship. "In the coup d'état, the choice of weapon used in order to bring down democracy then was the tanks," he said. "Well, this time, it was the banks."

What was the point of the referendum if the will of the people was going to be so quickly ignored? That question is being asked by millions of Greeks as well as their supporters around the world.

But the referendum won't have been in vain if organizations on the Greek left--inside and outside SYRIZA--are able to mobilize opposition to the new austerity program, both in parliament and in the streets, workplaces and campuses of Greece.

The democracy practiced by Pericles and the Athenians of ancient Greece was real, but very limited, resting on an economic foundation of slave labor. In every society since that was dominated by a minority class, democracy has been at best an ideal that is never close to fulfilled.

Among the many things at stake today in the battle for Greece is the question of democracy under the harsh conditions of 21st century capitalism. And we certainly know, from observing the behavior of the European political and business elite, which side values democracy. The rulers of the "free" market system don't even bother to pretend they care about it any more.