When Greek Prime Minister and Syriza party leader, Alexis Tsipras, announced last Friday that he would call for a referendum on the last bailout extension proposal offered by Greece’s creditors, the specter of democracy intruded into what had been a rather heavy exercise in technocratic rule. According to the European Commission, the European Central Bank, and the International Monetary Fund—still the “Troika” in the discourse of the left, though they prefer to be referred to neutrally as “the institutions”—Greece had failed to complete the required course of austerity. This prescribed response to the crises of EU member states had been shoved down the throats of Ireland, Spain, and Portugal, all of which had returned to some form of growth, but Syriza’s accession to power in January represented Greece’s refusal to take the medicine. After five months of negotiations, during which the Troika refused to bend on austerity or debt restructuring, Tsipras believed he had the requisite level of social mobilization to deliver yet another rebuke in the form of a referendum. On Sunday, we will discover whether or not he was right.

Referenda have an equivocal history in the European Union. Very often, votes on the governance structure of the EU have been submitted to voters in particular nations—typically on proposals that would further elevate the EU above any popular control—and voters have rejected the proposals, only to be threatened by EU member states with expulsion from the Union. The European Constitution—which would have instituted a European presidency; enshrined the idea of a “highly competitive” market “free of distortions” in European law (i.e. free of popular intervention); and enlarged the power of Britain, France, Germany, and Italy at the expense of the smaller member states—was rejected by French and subsequently Dutch voters in 2005. A revised version of the same proposal, now called the Treaty of Lisbon, was rejected by Irish voters in summer 2008. In both instances, the vote was seen as a referendum on the nation’s status within the Union itself. German intellectuals, including Habermas and the late Günter Grass, warned France that it would “isolate itself fatally if it were to vote ‘No’” in 2005, and in 2008, Frank-Walter Steinmeier, Federal Foreign Minister of Germany, argued that Ireland should be expelled from the union, leading then-President Nicolas Sarkozy of France to insist that “the Irish must hold a second referendum.” Then Lehman Brothers collapsed, and the Irish voters were frightened into affirming the Treaty on a second try, under the idea that isolation or expulsion from Europe would deepen their already miserable economic woes. When Europe does not get what it wants, it resorts to the direst of threats, including economic catastrophe.

The spectacle of European integration has thus followed a common pattern. First, the European Union erects bulwarks against popular will; then, it grudgingly lays its proposals before whatever popular will remains; and finally, should the people reject the proposals that would ultimately diminish their power, the EU threatens them with destruction. Brecht’s “Die Lösung” comes to mind (“Would it not be easier / in that case / for the government to dissolve the people / and elect another?”), as does the charge of the Caledonian general against the Romans in Tacitus’s Agricola (“They make a desolation and call it peace”). Though Tsipras himself called the referendum in Greece, which makes it distinct from Ireland’s in 2008, Europe’s dominant class once again sees an opportunity for coercion, threats, and invective. The goal on the part of the Troika is to frighten voters into accepting a Europe whose existence is based on fear of economic terror. If Greek voters say “No” to the creditors, they affirm democracy but still confront a Troika that may seek to punish them further. If they say “Yes,” they will lose the government they elected and receive one more in line with European technocracy. In either case, they are being presented with two versions of misery—more austerity within the euro, or the possibility of being shut out of capital markets outside it. Being part of Europe has not proven to be the blessing it was once thought to be.

Ever since the early 2000s, the EU has draped itself in the rhetoric of the Enlightenment and social democracy while quietly losing its claims to the heritage of both. As its borders extended past the Elbe and inched toward the Hellespont, the EU presented itself as a more civilized counterpoint to the gun-slinging America of the Bush Administration. But this European self-regard was suspect, as Perry Anderson argued, given the collaboration of several EU member states with the American invasions of Afghanistan and Iraq and the assistance of others in the extraordinary rendition of CIA prisoners to black sites around the world. This cooperation is not surprising, given that the US maintains 60 military facilities staffed with over 30,000 troops in Germany, 100 facilities and 23,000 troops in Italy, and 11,000 troops in the UK. Slightly more surprising is that not a single welfare state in the union has enlarged its provisions for the working-class and the poor. On the contrary, every single one has found new ways to roll them back, with Britain’s peppy New Labour raising university fees (and worse), and dour Germany successfully repressing wage growth far below its historical ratio with increased productivity.

How did this happen? Many historians of the EU have located the origins of European federation in the aftermath of World War II, when European nations decided to undertake a common project of prosperity through commitments to growth, full employment, social provision, and economic cooperation in the name of human dignity. There was also a felt need to form a counterweight to the two superpowers; the Treaty of Rome of 1957, which gave birth to the predecessor to the EU (the European Economic Community), was partly a response to the Suez Crisis of 1956, when the US and the Soviet Union both intervened to prevent the British and French from reoccupying the Suez Canal. Although the UK, still the most Eurosceptical nation in the Union, was slow to join the EEC, it eventually did in 1972. Much of the British Left feared the effect of European competition on British workers, but some saw the possible upsides of British membership: Tom Nairn’s The Left Against Europe? (1975), a book-length polemic published by New Left Review, argued against leftwing nationalism and in favor of the union’s potential role in bargaining collectively with capital on behalf of Europe’s workers and the environment.

But the Europe of the 1970s, when Communist parties in Italy and elsewhere were making substantial gains, is not the Europe of today. The idea of a European Economic Community committed to social democracy and shared prosperity began to give way in the 1980s to another idea—sometimes called “ordoliberal,” after a group of conservative West German economists. These economists held that competition, the control of inflation, and the correlated disciplining of labor were the central tasks of economic management.

Such arguments were a departure from the dominant Keynesian understanding of macroeconomics at the time. To use an anachronistic metaphor, Keynes approached the economy like a nuclear reactor: a combustible and nearly limitless source of energy that requires constant supervision if it isn’t going to either melt down or die out. Recall that inside a nuclear power plant is an ongoing reaction that is controlled by moving carbon rods in and out of the reactor core. These rods absorb the subatomic “bullets” that are flying around and splitting other atoms. If the reactor is too hot, the rods are inserted more deeply, thus absorbing more particles and slowing the reaction. If the reactor is too cool, the rods are pulled back, allowing the reaction to heat up. Push the rods in too deeply, and the reaction goes out. Pull them too far out, and the core overheats and melts through the plant floor—a “meltdown.” Keynes’s insight consisted chiefly in treating demand like the nuclear reaction and government response like the carbon rods. Sometimes demand was too low and required stimulation by government spending and increasing the money supply to encourage inflation; sometimes demand was too high and required raising taxes and shrinking the money supply to cool things off.

The Keynesian point of view illustrates the danger of any economic orthodoxy, like ordoliberalism, that insists on moving the carbon rods in only one direction. If regulators focus only on inflation, say, and not at all on unemployment, they have no way of stimulating the economy when things cool off. Austerity is the clearest result of such an orthodoxy: by raising taxes and cutting spending in a recession, it amounts to pushing the carbon rods deeper into an already cooling reactor. In fact, you could make the case that the global economic reaction was effectively dead in 1932—killed by austerity—before the explosion of the Second World War reignited it.

If orthodoxies like ordoliberalism and its fraternal twin neoliberalism are so dangerous and ineffective, why have they been so ideologically successful? Their success was confirmed most powerfully in 1983, when François Mitterrand—France’s first Socialist president —turned from an aggressive left strategy to an equally aggressive monetarist orthodoxy. But their real crowning achievement was the adoption of the Maastricht treaty in 1992, which committed the EU to instituting a monetary union ruled by a single currency. The euro created a reserve currency that could compete with the dollar, and reduced transaction costs across the eurozone. In order to ensure its soundness could not be threatened, fiscal discipline of member states had to be enforced, and the Stability and Growth Pact of 1999 tasked the European Commission with watching over the finances of member states and ensuring that they never ran deficits. Without currencies of their own, the member states were deprived further of the state power of printing fiat money to expand the money supply—something states generally do in a crisis when expansionary fiscal policies become necessary. No supranational state existed to back the member states; there was only the European Central Bank. As commentators never tire of pointing out, the crisis of Greece and the euro more generally derives from the fact that the single currency arrived without a fiscal union to support the monetary one, a set of political institutions that would safeguard the euro in the event of a financial crash, like the one swept through much of the world in 2007-9.

But the point isn’t that the fashioners of Maastricht and its successor addenda failed to create a fiscal union—it’s that they didn’t want to create a fiscal union. Instead, the goal was virtually identical to the creation of the gold standard in an earlier liberal era: it was to ensure price stability—that is, to avoid inflation—for the conditions of better trade. The single currency was to be backed by a single central bank that had no democratic accountability and whose sole mandate was to keep inflation below 2 percent. By contrast, even the American central bank, the Federal Reserve, is charged with controlling inflation and keeping unemployment low—but then half of its directors are also appointed by a democratically elected president. (For those of you scoring at home, this means that the central financial institution of the EU is constitutionally less progressive than its counterpart in the United States, as odd as that idea might sound.)

Observers recognized this at the time: the monetary union was a brief against the “social democratic” consensus of an earlier age, and in favor of an ostensibly self-regulating market. “As the treaty proposes no new institutions other than a European bank, its sponsors must suppose that nothing more is needed,” wrote Wynne Godley in the London Review of Books, just after Maastricht’s adoption. “But this could only be correct if modern economies were self-adjusting systems that didn’t need any management at all.” This, Godley understood, was precisely the point: the ordoliberal view that produced Maastricht held that governments only existed to watch the nuclear reaction regulate itself.

Readers of Karl Polanyi’s masterwork The Great Transformation, about an earlier era of liberalism, will see parallels between the obsession with preventing the inflation of the euro and the inviolability of the gold standard:

[U]nder the gold standard the leaders of the financial market are entrusted, in the nature of things, with the safeguarding of stable exchanges and sound internal credit on which government finance largely depends. The banking organization is thus in the position to obstruct any domestic move in the economic sphere which it happens to dislike, whether its reasons are good or bad. In terms of politics, on currency and credit, governments must take the advice of the bankers, who alone can know whether any financial measure would or would not endanger the capital market and the exchanges. . . . The financial market governs by panic.

Replace gold standard with euro, and you essentially have the situation in the eurozone today. It bears keeping in mind that Polanyi was attempting to explain, in part, the orthodoxies that led to the rise of fascism in Germany and Italy.

This brings us to the darker aspect of the European Union’s gradual subordination to the requirements of the eurozone. Periodically, EU treaties are submitted to popular vote. Almost invariably, these have been rejected by their populace—as with the double rejection of the European Constitution by France and the Netherlands—occasioning fury by European Commission members, who end up ramming through the proposals anyway. Since Maastricht, the EU has repeatedly sided with the needs of the currency against the voice of the people—something amply in evidence in the Troika’s response to the Greek referendum—which appears as simply another sorry attempt by a people to take control of a situation they ought to have no voice in. But even this technocratic disdain for human liberty is not yet an embrace of fascism, any more than refusing to expand Medicare is the same thing as actually pulling the plug on someone’s respirator. There are several intervening institutional moments. But this is precisely why it is important to connect the two ends of the sequence: to show how one kind of decision made the other possible. It is necessary, in other words, to understand the political economy of fascism—not because fascism is certainly going to triumph in Greece, but because it might. And such a possibility is not something that should be explained by chance.

What we mean by fascism is a militant nationalism of the kind embodied by Syriza’s chief ideological rival in Greece, Golden Dawn. This fascism is perhaps better described as a traumatized nationalism, marked, in the words of Robert Paxton, “by obsessive preoccupation with community decline, humiliation or victimhood, and by compensatory cults of unity, energy and purity.” Nationalism can become traumatized when a given group of people is punished as a nation, as happens during a global economic crisis when the fallout is distributed unevenly, according to nationality. This uneven distribution of suffering along national lines cements the corresponding identity as the most significant material factor in an individual life. For example, the difference in experience between a worker in Germany and one in France in 1932 can only be fully explained by reference to nationality, however immaterial that form of identity may have been in the past.

Nationalism is thus not so much taken up by a group of people as it is forced upon them by an international economy in search of a mechanism for allocating the damage done by its own inevitable crises. The nation-state solves this problem so efficiently, from capital’s point of view, that it sometimes seems to have been invented for precisely this purpose. As a mechanism, the nation-state not only allows for national identity to triumph over class identity, among other kinds, but it insists on it, precisely by making the nation the thing that hurts. It was partially by this mechanism that “being German,” which was a new reality in 1871, could, by 1933, come to compete so effectively with “being a worker,” which had a much older and more well-developed pedigree.

We say “partially” because history also teaches us that the character of fascism has a limited appeal, and, as a result, can only triumph with the aid and support of the ruling class. This was clearest in the German and Italian cases, when von Hindenburg and the Italian king appointed der Führer and il Duce respectively. This is why it is necessary to speak about fascism even when it would appear to be only a minority position in Greece: because the ECB, the IMF, and the rest are giving aid and support to that position in at least two specific ways.

First, they continue to provide, in the form of suffering, a material basis for an imagined community of 11 million people, precisely by making said people suffer as Greeks. This suffering, it must be emphasized as often as necessary, is entirely out of proportion to any responsibility for the larger crisis on the part of the people in question. Any attempt to naturalize this disproportion by reference to some essential Greekness is the most violent and dangerous kind of lie: a racist lie. Racism is the most dangerous lie precisely because it transforms an irrational, contingent, and unjust solution to a larger collective problem into an eternal and necessary condition. Consider that if half of what we have heard about the Greeks in recent years were actually true, then we would be justified in enslaving them immediately. In fact, they have already been enslaved by the monetary union, and it is their Greekness that has been retroactively reconstructed as a justification for this enslavement, where Greek now stands in for “lazy,” “shiftless,” “good for nothing,” and whatever other ridiculous adjectives we deploy to justify the unfreedom we inflict on others.

Second, the Troika is supporting the traumatic, nationalist narrative in Greece by actively attempting to undermine and destroy the internationalist, democratic alternative. As our friends in Cyprus put it to us several months before Syriza was first elected, the danger of a left-party taking power in an ungovernable situation is that whatever happens will reflect back on the ideas they represent. The challenge, then, is to fail in such a way so as not to take the idea of democracy down with the ship. But the EU has made such a managed failure impossible, insisting instead on the complete and utter humiliation of democracy in Greece. This is not hyperbole; this is a fact. What is most important to the Troika is that the suffering poor of the continent must not be allowed to think that democracy will save them. And this is why the governments that have the most to fear from their own people, like those of Latvia, Portugal, and Spain, have insisted on punishing Syriza so aggressively.

The Greek referendum is not only a demonstration of democracy in practice, it is also an effort to save democracy in theory—that is, to distribute the responsibility for the inevitable fallout from leaving the euro as widely across the political spectrum as possible. When the pain comes, the blame won’t fall only on those of the democratic faith. For this, too, we owe Syriza our gratitude, whatever the future may hold.

What is the best case scenario for Syriza? It is certainly hard to imagine that they could do any better under the circumstances. The comparison that kept occurring to us was the saga of Daisuke Matsuzaka, a Japanese pitcher, whose efforts to join the American major leagues nicely illustrates the difficulties of governing a national economy when capital is fully globalized.

When a Japanese player wants to play in America, the thirty teams in major league baseball each submit secret bids, not to the player, but to the player’s Japanese team, in exchange for exclusive “negotiating” rights with said player and his agent. Negotiation here is in quotes because the player has no leverage to speak of. Should they fail to reach an agreement with the winning team, they are sent back to Japan, to possibly pursue the same process again the following year, when, as a professional athlete, their value will have declined. This rarely happens, as players are under immense pressure to secure these windfalls for their Japanese teams, and because whatever below-market deal they sign in America is still likely to exceed what they would make in Japan.

So when the Red Sox won the rights to “negotiate” with Matsuzaka by submitting an unprecedented $50 million bid, they found themselves dealing with Matsuzaka’s agent, Scott Boras. Boras then did what perhaps would have been Syriza’s only other course of action than the one they have pursued: he refused to talk to the Red Sox at all. Instead he gave every impression of being willing to place Matsuzaka back in the Japanese leagues. As the negotiating window grew smaller and smaller, the Red Sox grew more and more panicked, until eventually their owner hopped on a plane the night before the deadline and flew to Boras’s house. The resulting contract was still nowhere near what Matsuzaka would have gotten on the open market, but it was far better than what might have been expected under the circumstances. Boras came out looking great.

In this metaphor, Syriza is Boras, the EU is the Red Sox, and Matsuzaka is the people of Greece, who had no leverage, really, to begin with. Of course, the reason why Syriza couldn’t pursue the Boras strategy in full is that they would have had to campaign either on leaving the euro outright, which would have meant hell to pay if they didn’t leave. Or they would have had to campaign on the tactic as a tactic, which is obviously impossible: it’s hard to bluff when you have 11 million clients who will only hire you if they know you’re bluffing.

The metaphor also nicely illustrates what might have been the best theoretical scenario for the European Union. Had it been instituted at a time when liberal orthodoxy wasn’t quite so dominant, it might have served as a player’s union representing the entire labor force of Europe—to say nothing of the environment—and bargaining collectively on its behalf. A bargaining unit so large could have done quite well by its constituency. Capital, by contrast, loves a multiplicity of nationally bounded labor markets, because the more nation states there are, the more competition there is for capital. This means that national governments themselves are put in the position of policing their own labor forces in order to make them as attractive as possible. Essentially, national governments become pimps under such circumstances, competing to exploit their workers the way pimps compete to exploit theirs. Larger political economic unions thus present the possibility, not the guarantee, of a larger collective bargaining unit capable of mitigating some of this damage. It is to this sort of internationalist possibility that Tsipras has consistently appealed during his brief time in office. A Greek exit may be the only viable strategy at the present moment, but this strategy only makes sense—that is, it is only strategic—when connected to a larger theoretical account of the transition to another international economy: one in which labor enjoys the same rights of movement as those granted to capital and is protected by a standardized set of global minimums.

The reason ordo- and neoliberal orthodoxies have triumphed in spite of their obvious unworkability is that they have managed to recast what are ultimately police measures—keeping labor costs down, controlling inflation—as some kind of religious program, equal parts redemptive and sustainable. Valorizing submission and stigmatizing leisure, these orthodoxies are contemporary equivalents of feudal Christianity: a slave morality for the globalized age. This is useful when regional governments—be they nations in Europe or states in the USA—must pimp their populations in order to attract some of the few jobs that remain, now that technology has made work less necessary than ever before. And this is why things have gotten so medieval during the current crisis: because it is very difficult, finally, to stimulate an economy without raising the price of labor or increasing inflation. But to do so when capital is free to leave at any time is to simply encourage it to relocate to places like China, where a highly evolved authoritarian state keeps the price of labor very low indeed, to the eternal delight of “free-market” capitalists like Steve Jobs. It was this pattern that brought Mitterrand to his knees in 1983, and it was this pattern that Syriza was trying to change.

But history, as Marx said, weighs like a nightmare on the brains of the living, and this euro isn’t the currency of Blanqui or Garibaldi, it did not circulate during the Commune or buy tickets for the Lysistrata. Instead it is the preferred issue of late capitalist imperialism, made in the image of anti-communist utopia, a place where markets regulate themselves, life is cheap, and the price of democracy is already too high. Derrida once referred to 9/11 as a kind of autoimmune disease, wherein the antibodies the West had created to defend itself in the cold war ended up attacking the host itself. And so it is with the ideology behind the pathetic excuse for human institutions now savaging the representatives of democracy in Greece. They are attacking the very body that keeps them alive, and if they succeed and continue succeeding, sooner or later, they and that body will die.

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