Mon Dec 10th, 2012 at 06:21:04 AM EST
Yanis Varoufakis went to Vienna to address the Kreisky Forum, and he asked why European Social Democrats have (not got a clue)? (h/t Migeru)
At the Kreisky Forum: Why have Europe’s social democrats surrendered to the toxic logic of current policies? « Yanis Varoufakis
In the 1980s and 1990s, Europe’s Left (the social democrats in particular) abandoned the notion that labour, financial and real estate markets are profoundly inefficient, with inequality being a mere byproduct of that inefficiency; a byproduct which, nonetheless, feeds back into, and exacerbates, the inefficiency and instability of a capitalist society that allows itself to rely on the ‘free’ operation of these three (problematic) markets. Europe’s Left, at the time of the Rise of the Global Minotaur (i.e. from the late 1970s till 2008), increasingly forgot that
- the more financialised capitalism becomes
- the more labour is being treated like any other commodity
- the more our societies rely on house price bubbles as a source of rents and debt
the more unstable, crisis-prone and, ultimately, uncivilised capitalism becomes.
Having forgotten this and attempting to compromise with capitalism:
...when in 2008 the tsunamis of capital produced by Wall Street, the City and Frankfurt crashed and burnt, Europe’s Social Democratic side of politics did not have the mental tools, or moral values, with which to subject the collapsing system to critical scrutiny.
Which is exactly what we can observe (see "not a clue" above). Though I'm not sure that Varoufakis' description of the process is complete.
They saw the rivers of privately minted money that the financial sector was printing (while labour was squeezed and real estate prices soared) and thought they could harness some of it in order to pursue social democratic policies! Rather than (as the social democrats of the previous, Kreisky era had to do) target the profits of industry, as a source of funding social programs, social democrats thought they could tap the rivers of cash produced in the context of financialisation. Let finance free to do as it pleased and then tap into some of its proceeds to fund the welfare state. That was their game and, at the time, it seemed to them a better idea, more fathomable, than having to be constantly in conflict with industrialists, seeking to tax them in order to redistribute.
And he cites Blair and the PSOE as examples of some who may have squeezed some juice out of financial capitalism. Now, I don't disagree with this, but it seems to me it went further than just taking the easy way out. I don't think the centre-left has any leaders left who have not completely swallowed the basic ideological premise that markets are in fact efficient, and that they are the only way, TINA.
Example: an (otherwise sympathetic, at least I find) politician like Michel Rocard has spent years trying to persude the French Socialists that they must imperatively "accept the market" -- ie the market ideology. Rocard is now content to see that his efforts have not been in vain, see Hollande.
Any counter-examples to belief in markets on the part of social democrats?