Greece’s no vote has left everyone wondering what it all means. While the topline summary is that no won with 61.3% of the vote, this is perhaps not the landslide victory it has been hailed to be.

For a start, there is confusion around what the referendum was actually about. Were Greek people voting to decide whether to stay in the Euro? Was it about saying no to more austerity? Or defending national pride and southern European culture? Talking to Greeks yesterday, you might have thought there were several referendums happening simultaneously – a perfect illustration of just how muddy the waters of the debt crisis are.

For many following the crisis for the last five months, it has become clear that it is not just about Greek debt. Beneath the cultural tensions and ugly stereotypes, an ideological war is taking place. This battle is happening because the current economic system has only two answers to debt crises, recessions and slow economic growth: stimulus and austerity.

Stimulus is about the government pumping money into the economy to encourage consumer spending, which will theoretically lead to economic growth. In recent times, stimulus efforts have taken the form of the government spending money on infrastructure and other socially beneficial projects (think the New Deal) and quantitative easing. Austerity is a set of measures that aim to cut government spending and shrink the public sector to make the economy less dependent on it, which in theory should make room for and encourage a burgeoning free market (ie neo-liberalism).

The argument against government-led stimulus asks how the economy can grow if the government has to keep expanding its debt and/or money supply in order to start new projects and stimulate the economy. Surely the stimulation it provides will never compensate for growing levels of debt? Anti-austerity advocates, on the other hand, ask how the economy can grow if people make less money and taxes are higher – people will save, not spend, and economic growth is based on consumer spending.

The issue of austerity versus stimulus is often framed as the entire debate – if you don’t support one, you must support the other, because there are no alternatives. This is the same binary debate that has been going on for more than 100 years between the state versus the market. Yet, these dichotomies distract people from thinking about what’s really important – the goal of these policies, which is to grow the economy.

No analysis I’ve read thus far has questioned the damaging role that the endless quest for economic growth plays. Neither austerity nor government stimulus will ever be able to address the debt crises and recessions of the twenty-first century because what we’re dealing with here is an inherent contradiction of capitalism.



This contradiction comes from the surplus of the system (profit) being taken out of the real economy (the economy of physical goods and services) and put into the financial sector to generate more wealth for people who are already wealthy. This requires the economy to continually grow to compensate for the extraction of profit, which is essentially the extraction of the economy’s surplus.

However, this extraction of profit is the same mechanism at the root of soaring levels of inequality. A recent Oxfam report estimates that, by 2016, the richest 1% of the world’s population will own more than the other 99%. If the average person is making relatively less every year, or struggling just to maintain the same financial state, they can’t afford to buy ever more products and services, so the economy can’t grow as it did when we had more financial equality. Thus capitalism has always carried the seed of its own demise.

We are seeing this self-destruction in Greece. The current Syriza government wants to go back to the negotiating table and create a new bailout agreement that will cut the debt to a more manageable size and reform the public sector in ways that won’t affect the most vulnerable. This would still be austerity, albeit a much milder version than that of the past five years. Yanis Varoufakis resigned from his post as Greek finance minister to allow for smoother negotiations between Greece and its European partners in the hope of reaching such an agreement.

If an agreement can’t be reached, Greece might well go back to the drachma. However, the government has no clear plan for this and an unplanned exit from the euro would be painful, with the poorest hit the hardest.

In all of these scenarios, the government’s goal would still be to re-start economic growth, even at the cost of creating more inequality. None of these options gets to the roots of capitalism’s inherent contradiction. There’s no way to grow ourselves out of this crisis; not for Greece, not for the rest of the world. What we are witnessing is the beginning of the collapse of capitalism.

So what is a sustainable path forward for Greece? If the Greek government could see that it won’t be able to re-start growth, and that GDP growth is a means to an end, not an end in itself, there are steps it could take to start paving a new path to prosperity for its people.

In addition to the basics – restructuring the Greek debt, deep reforms in the public sector to make it more transparent and accountable, and the strengthening of the solidarity economy – I suggest the following:

Greece should go back to a national currency to have more autonomous decision-making with regards to its own economy, which it needs if it wants to pave a more sustainable path. This is not a simple move, so the government will have to have a plan for such a transition, with safety netsto protect the most vulnerable.

The government should nationalise the banks and encourage people to start credit unions. This will re-align the banking sector with the needs of citizens and make the banks more resilient. Credit unions would empower people to take financial matters into their own hands.

Greece should keep for-profit interests from buying up its common wealth. This could be done via land trusts, not-for-profits and amending the constitution to make it unconstitutional for the government to sell off the commons.

The Greek government should start using a wellbeing or happiness index to measure success, as Bhutan does. In this age of inequality, working class people and the unemployed can easily slip through the cracks of GDP growth.

Businesses and the government should shorten the working week and encourage job-sharing, so more people can have part-time employment. This would counter the current problem of some having no work while others work 50 hours a week.

Finally, the government should create legislation and encourage not-for-profit enterprise in every sector to prevent the extraction of profits from the real economy and encourage social entrepreneurs and innovators to start up their own not-for-profits. These enterprises would help alleviate the humanitarian crisis in Greece, create a more stable economy and keep the financial surplus in the real economy. By building an economy around social purpose, Greece could usher in the post-capitalist era, rather than fall victim to the unavoidable collapse of capitalism we are witnessing.



Jennifer Hinton is the co-author of How on Earth: Flourishing in a Not-for-Profit World by 2050, which will be published in October 2015