Paper from Corporate Watch on the Eurozone Crisis

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FionaK
view post Posted on 13/3/2015, 13:13




www.corporatewatch.org/publications...uro-zone-crisis

This paper, called False Dilemmas, aims to
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bring together all the relevant issues so that those with or without prior knowledge of this issue can
understand the many dimensions of the crisis. We explain the key events and themes, critically examine the official narratives
and debates, and explore what alternative perspectives are out there.

It is well in tune with the aims of this board, in that it explores how the debates are framed and the use of "big words" to pursue an agenda.

One of the central themes is the production of "False Dilemmas" which serve to set us against each other and to limit the terms of debate to a narrow set of proposals which bear little relation to what is actually going on. Those false dilemmas include such things as "austerity v default on debt" and "immigration v employment" and they serve to distract us from the roots of the problem we all face and to put the "blame" on folk who have nothing to do with it, really.

The paper does not support a view I have myself held: that there needs to be a return to a kind of Keynesian approach to economics. From the authors' perspective

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the contemporary economy has been transformed into a financialised, debt-based economy. It has been aptly summarised by political
philosopher, George Caffentzis, as an economy which, in times of boom and bust, “you are not only exploited, but you are expected to take out loans to be
further exploited.”2 Imagining a return to a pre-crisis era fosters delusions that the marginalisation and pauperisation that are imposed in the name of that
return are somehow justified.

I do not agree with that analysis, because I do not accept that debt was a major feature of the "post war consensus" position of most people. Debt did not become "normalised" until after the shift to neoliberalism in the early 1980's, in this country. Increased equality and prosperity for the majority was short lived, but it seems to me that it did exist before the emergence of the debt based economy they correctly identify as our current position. Indeed most people were afraid of debt after their experiences in the 1930's and leading them to accept it as normal was not easy: see the Debt thread for more on that.

However I do agree that neoliberals have successfully narrowed the debate so that when people talk of a return to "business as usual" they do not generally envisage a return to the post war consensus arrangements: that is because they have made debt a central plank of normal life and have made tax a dirty word, amongst other things. Those perceptions would have to change radically to achieve a return to better outcomes for the majority. Nor am I resistant to the idea that there may be even better ways to achieve the goals I seem to share with the authors: the question is what is achievable and I think they are a little more optimistic than I am.

The paper is divided into 4 parts. First it looks at "supra national organisations" and in particular the institutions of the EU: then at what governments have done: third, at who profited from the crisis: and finally at how people have responded to the crisis.


Of interest in the first part is a very clear outline of the different EU institutions and their functions. This includes various reports about how those bodies behave in practice as well as in theory. For example there is a piece about the adoption of the euro, and it is clear that the driver was at least in part the banks and corporate lobbyists, who have quite remarkable influence on these largely undemocratic institutions.

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Morgan Stanley was startlingly frank regarding the businesses case for a single currency, stating in 1998, “If we abolish the national currency as a safety mechanism, governments will have to focus on real changes for the countries to become more competitive: less taxes, flexibilisation
of the labour force and a more welcoming environment for business”.

The authors take the view that the EU is essentially a club for big business: it is hard to disagree.

Chapter three is interesting because it lays out different views on the cause of the crisis, and points out that proposed solutions rest on what the proponent believes about cause. It divides the various positions into headings, thus: Bad Policy, Faulty Design, False Theories, Human Nature and Cultural Origins; and discusses each of these. This is useful because, as has been noted many times on this board, these assumptions are seldom admitted and very often they are smuggled in without any discussion or evidence at all.

In that connection this quote seems to me to conceptualise something I see often when discussing the problem with some of those who oppose austerity: the depth and reach of the mainstream narrative is astounding and works well to preserve the basic assumptions of the neoliberals within the analysis of their opposition

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The crisis of the euro zone is an excellent example of how flagrant lies can successfully be converted into accepted wisdom. Almost every generalization about the crisis found in the mainstream media is false. As a result, the mainstream punditries on the crisis are ideological polemics masquerading as analysis. Further, often progressive critiques of the reactionary “austerity” policies by the euro zone governments accepts the
mainstream faux-facts about the crisis, fuelling the There-Is-No-Alternative (TINA) syndrome

With particular reference to the so- called centre left parties' approach (which is most familiar to me in the form of the British Labour Party) the authors have this to say:

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. Engaging in a wrong framing usually backfires, as it legitimises the framing while the different sides discuss the details

This is what I have previously described as "tinkering" and so we have the spectacle of a self described leftist party pledging to impose more austerity than the Conservatives, but to do it in a "fairer" way, or more slowly. Both the British Labour party and the SNP engage in this to different degrees. It is not a good strategy, as these authors explain

Edited by FionaK - 13/3/2015, 14:38
 
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