I woke up this morning thinking about the type of people who are thrown up by our political systems and put before us for election. I have spent the last few days mulling over the surge of support for Jeremy Corbyn’s leadership bid and that alone would have given me reason enough to put this rant down on paper. But the actual spark came from a member of that monument to democracy, the Bush dynasty.
The mantle of political entitlement has now passed to Jeb and he picks up where his celebrated brother left off by completely misunderstanding the world around him. This week he made a few headlines with his outrage at Obama’s plan to extend overtime coverage to managers earning below $50,440 per year (essentially reducing the possibility of lower salaried workers being forced to work additional hours for no extra pay). Jeb was stunned by this frivolity and, on top of claiming that Americans need to work more hours, not less, he showed his finely tuned economic skills by telling us that this new rule would result in less overtime pay and less wages earned. Sensible members of the human race (and a few economists) were quick to point out the many flaws in this reasoning. First of all, by curbing the exploitation of some managers, employers would be forced to use more workers and/or additional overtime to pay to cover the same workload. The argument that companies would cut salaries to compensate for this new rule is just not credible.
While the Eurogroup ministers prepare to work through the night to try to reach a deal to paper over the cracks of the problems in the Eurozone, it’s time for a quick change of focus. Regular readers of this blog may have noticed my feeling that society is fundamentally misaligned with the needs of its people. Capitalism’s firm hold over the individual and collective psyche means that policies and actions are market-oriented, even in many cases where we might wish otherwise. I have discussed this to some extent elsewhere (see The Inner Class Divide) and have mentioned my belief that modern society lacks strong social institutions which can develop a sense of communal endeavour and belonging. Needs of individuals and communities which do not find themselves aligned with a market objective are often ignored or manhandled by the state.
I was pleased therefore to come across an article last week showing firm evidence of what can be achieved through social and community solutions. British journalist, Johann Hari has gained recognition for his work on the ‘war on drugs’ and has highlighted how Portugal has gained unprecedented success by turning to communities instead of the strong arm of the law. According to Hari,
“Professor Peter Cohen argues that human beings have a deep need to bond and form connections. It’s how we get our satisfaction. If we can’t connect with each other, we will connect with anything we can find—the whirr of a roulette wheel or the prick of a syringe. He says we should stop talking about ‘addiction’ altogether, and instead call it ‘bonding.’ A heroin addict has bonded with heroin because she couldn’t bond as fully with anything else.
So the opposite of addiction is not sobriety. It is human connection.”
Big countries have a history of making small countries pay their debts. Historically it does not matter whether loans were taken out voluntarily or whether they were imposed via some imperial gunboat diplomacy, but there should be no doubt that economic giants like to uphold a contract. When the once powerful Ottoman Empire defaulted on its obligations to French and British bondholders in the 19th century, the two great European powers promptly set up an Ottoman tax collection agency and effectively launched a financial coup d’etat on the Sultan and his flagging empire. The new Ottoman Public Debt Administration (OPDA) was launched in 1881 to ensure that foreign creditors would receive their dues, and grew into a vast bureaucracy of almost 10,000 employees. In addition to debt collection the OPDA also branched out into wider financial affairs and became an important intermediary for European companies looking to invest in the Empire. Due to its vast reach in the Ottoman public service, the OPDA guaranteed both financial security and favourable commercial opportunities for its partners. What began as a debt default morphed into an imperial occupation in all but name, with contractual obligation and trade opportunity being the core principles. It mattered little that much of the Ottoman Empire’s public debt had been acquired through its role in the Crimean War, a conflict in which it fought side by side with both the British and the French. A deal was a deal, and when the Ottoman Empire ultimately defaulted on its debt, its ‘allies’ swooped in to enforce repayment.
I was reminded of this financial colonisation last week with Wolfgang Schäuble’s offer to send 500 German tax collectors to Greece. The circumstances are obviously different but perhaps there are still parallels we can draw. Greece entered the Eurozone in collaboration with its European partners in celebration of the collective vision of European integration. Countries across the continent came together to become firm economic allies, united by a shared currency. It has subsequently become clear to all however that Greece did not meet the original economic requirements for euro membership. Allegations arose that the Greeks had cooked the books and worked with Goldman Sachs on a deal which involved cross-currency swaps at fictional exchange rates. This enabled them to circumvent the Maastricht rules and ‘meet’ the Eurozone requirements. Military and healthcare expenditures were often left off the balance sheets over the years as accounting fraud helped to maintain the illusion of financial stability. None of this is anything new of course and Angela Merkel has expressed her belief on multiple occasions that Greek euro membership should never have been approved.
It has been a tumultuous couple of weeks in European politics. From a socialist perspective these are encouraging times and the victory of Syriza in Greece, along with the quarter of a million people marching for change with Podemos in Spain, have shown that there is a real possibility of political change on the horizon. But as always in politics things are far from certain and these popular leftwing movements need to defend themselves from attacks from both inside and outside their own countries. It is already clear that the leaders of these parties recognise the importance of solidarity and support for each other, with Pablo Iglesias’ pre-election appearance in Athens being a notable example. But it is not evident yet how pan-European this revival of the radical left is. At some point in the future I plan to write down a few thoughts on why radical (or in some cases revolutionary) spirit can catch on in one country but not another. In other words, what are the forces containing or spreading this political awakening of the people? But in the meantime, I thought I’d take a quick look at Spain’s neighbour on the Iberian Peninsula to consider why the left has failed to capture the public imagination in Portugal in the same way that Podemos has in Spain.