- Created: Thursday, 26 July 2012 09:44
- Written by Leonard Gentle
A late 2011 Cape Times editorial carried the excellent suggestion that states should be able to borrow money at the same near-zero interest rates that banks are charged by public authorities (which money the banks then proceed to lend at exorbitant rates – actually make that play the stock and bond markets where they make enormous profits). In one fell swoop the sovereign debt crisis would be solved!!
Obvious you would think….So why doesn’t that happen?
In Latin America countries such as Brazil, Argentina and Venezuela have set up a Bank of the South – an alternative development bank to the World Bank and the IMF, based on public resources, which lends at low interest rates without the pernicious conditionalities of the IMF, and without resorting to the bond markets.
Some Chinese central bank officials have raised the need for a new reserve currency to the dollar given the precarious nature of the US economy and the tension between having being crisis-ridden national economy and yet its currency is the currency of global trade and the store of national reserves.
But who is going to change the world in ways that the Second World did – which led to the Bretton Woods arrangements wherein the dollar became as good as gold? Certainly not China who is in hock to US capitalism because it is the biggest owner of US Treasury Bonds.
The environmental justice movement has been able to prove that current levels of industrial production and forms of energy use are leading to global warming, which will be devastating for the planet. Every scientific survey confirms this picture. So current levels of output need to be cut or stabilised and we need to move away from fossil fuels ….Obvious you would think …So why doesn’t it happen?
OK! there is the argument that jobs will be lost and people would be impoverished. So let’s have jobs that produce public transport rather than private cars; that produce renewable energy technologies (which all evidence shows will create jobs); and let’s distribute output better so that jobs actually expand and poverty is reduced …
Obvious you would think …So why doesn’t it happen?
Because this is not a matter of scientific rationality or the application of the “finest minds” to a problem. This is sheer force - the force of a global elite - able to seduce, bribe and intimidate supine governments.
We know who the beneficiaries of the current malaise are: the bankers and speculators, the arms dealers, the food speculators, the hedge funds, the rating agencies, Big Oil and the bond holders. We know who their South African equivalents are – the monopolies who owned 75% of the old SA and successfully went global; their BEE hangers-on and the bankers who provide sheltered employment for our ex-Reserve Bank governors.
So why do they get away with it?
Because the democracy has been hollowed out and the forces for social change have been weakened over many years. And the notion that economic policy is an “economic question’ is a result of the decades of weakness of the political Left. Not the Left as in Left thinkers and intellectuals – of which there is no lack - but the Left as a social force – a project of a mass movement of millions of ordinary people whose aspirations are articulated in this way.
But, today, the tide is turning…
In terms of global power the USA is in inexorable decline and China is too riddled with its own contradictions to take its place. We no longer live in a unipolar world.
We have all been inspired by the Arab Spring and the extent to which the people of Tunisia and Egypt could rise up and overthrow seemingly omnipotent dictators. This was preceded by an upward tide of almost 10 years of social movements in Latin America – movements which were able to reverse the tide of privatisation at Cochabamba in Bolivia; that were able to establish new forms of land tenure and usage as the MST did in Brazil; and that were able to take over factories in Argentina and Venezuela. Latin America today has for the first time in its history graduated from being the mere playground of the CIA and the US State Department.
The occupation of Tahrir Square in Egypt was not only able to topple the West and Israel’s favourite dictator – Hosni Mubarak – but inspired a new movement of counter-power in Spain’s indignados. Today there is a revival of workers’ movements in South Korea, Britain, and France, and even a wave of strikes in China.
On the eve of June 17 2012 every economist and politician held their collective breathe. Financially embattled Greece was going to a repeat election after the first ended in an impasse - with nearly 2/3 of the electorate rejecting the brutal austerity measures imposed on the Greek people by the Troika of the EU, the European Central bank and the IMF. The opinion polls suggested that the party SYRIZA –a coalition of the radical left – which had unequivocally stated that it would tear up the austerity agreement, could actually win.
For months all of Europe had been told that the austerity package was non-negotiable and had to be abided by.. to the letter. Without the bail-outs, it was claimed, Greece would not even be able to pay salaries let alone honour the debt commitments to bond holders…So a SYRIZA victory and honouring of its pledge to repudiate the austerity deal was simply unthinkable.
Well we all know that the conservative New Democracy narrowly won and that they have been able to form a new government with its pro-austerity partner Pasok. Yet, suddenly, against all the bleatings of the financial journalists, the Troika, including the German government of Angela Merkel, supposedly the most intransigent, is now prepared to meet Greece to re-negotiate the terms of the agreement – to “help Greece in its hour of suffering” avoid the social costs of too much austerity too quickly!!
Too be sure these assurances are hypocritical but the very fact of such clear rejection of austerity by the Greek people, that a SYRIZA political victory was so close, that the New Democracy-Pasok alliance will be paralysed by their unpopularity means that the Troika has had to back off – even if only rhetorically. Not for the first time the economists have got it wrong and this incident shows that politics can triumph over what appears to be an economic consensus.
But these are new beginnings from a world that has known nothing but anti-democracy for some 30years. And these beginnings are confronting setbacks and new battles along the way – in Libya, Bahrain and Syria, and in the form of the ongoing military rule in Egypt.
The new movements are a sign that a new international working class movement is being forged and, consequently, a revival in progressive politics. But that revival has to contend with the fact that the last 30 years have not been kind to the Left, let alone its ideas.
One of the many casualties of the neo-liberal triumphalism of that period and Thatcher’s aphorism “There is no alternative” was the cohort of Left thinkers itself. What became deeply etched there was a kind of fatalism: capitalism is here to stay and its elite are impregnable. All that was possible was some kind of kinder form. Alternatively, political power was a poisoned chalice and all that was possible was a form of identity politics and a moral lifestyle.
And so, in Europe, all the parties of Social Democracy abandoned programmes of redistribution and expanding public goods and simply espoused some rhetoric of a “Third Way” or an “equal opportunity society”. The trade unions either embraced protectionism or sought to find some kind of industrial strategy that could make their country competitive. The national liberation movements of the South – like the ANC – got into bed with their erstwhile oppressors epitomised in the words of Smuts Mngonyama: “I didn’t struggle to be poor”.
Even the movement which was able to show, dramatically, how life-threatening capitalism is – the environmental movement – couldn’t contemplate a future without it, and so got mired in the politics of accommodation and mitigation and even endorsed carbon trading.
Here in South Africa the possibility of alternatives is compromised by the line up of forces that make up SA’s political terrain. The ruling party practises the dominant neo-liberal policies that got the world into this mess. But its liberation credentials and its electoral base make it speak “Left” (except of course when it is speaking to investors). So it has a history of rhetorical flourishes about a “developmental state”, “new growth paths” etc. Recall that even the infamous neo-liberal GEAR policy masquerades under the name of very progressive things like “Employment” and “Redistribution”. The main electoral opposition party – the DA – takes this tension, hypocritically, accusing the ANC of being a “socialist” wolf in a capitalist sheep’s clothing, whilst implicitly endorsing all the economic policies of the government. Thereby adding to the confusion…
The large mass movements of yesterday – the COSATUs, the old civics – have become inextricably-linked to the current order. COSATU has become a peripheral force amongst the working class which has been re-structured in ways which have largely passed COSATU by. The SACP is nothing but a caucus group in the ANC and is not a bearer of mass struggles. Its presentations of alternatives are always muted by the close, intimate relations with the state and the playing out of succession battles within the ANC.
The township-based movements of service delivery protests are the most active social force today but the battle for alternatives - as articulated in the media and amongst public intellectuals – is not being conducted with any of their support, let alone with them as the bearers of these ideas.
So Left ideas for alternatives are still a long way away from being the programmes of mass movements. They appear so out of synch with the dominant right wing discourse because they are not yet backed by a social force that can give these ideas public currency.
But deep within all of us are simple desires that no economist can speak to – decent housing, education for our children, public transport, free health care, nutritious food, a clean earth and the opportunity to dance and sing and be creative. These are as much “economic” priorities as growth rates, balance of payments, inflation rates and bond rates.
And for this reason the point of departure for engaging debates about “the new economy” for resolving poverty and inequality South Africa’s is to be clear that this is a political question about the need for democratic control over public officials – including those charged with accounting and public finances - and ending the tyranny of the speculators, bankers, hedge fund managers and the rating agencies. The quest for a “new economy” is therefore not so much a beauty competition over alternative economic models but an urgent matter of forging a new movement for democratic control over “the economy” – both here in South Africa, and globally.