07 May 2010

Greece: Austerity, Adversity and the Personal Responsibility of Citizens

It takes some effort to find an account of Greek opposition to the country's austerity plan that isn't just a description of rioting and arson. Here's a sympathetic interview with a "Socialist Worker" who opposes the plan from the position of the "anti-capitalist left." You have to get to the end to find out what he proposes as an alternative, and it's not surprising: default on the Greek debt and nationalize the banks.

The austerity plan, required as a precondition to an EU bailout, was rammed through the Greek legislature by the ruling socialist party over objections from communists and "conservatives." It includes increases on existing taxes and a onetime tax on corporations, as well as cuts in social programs and compensation to public-sector workers. Some of the measures do not inspire compassion for the oppressed Greeks. They may want to mount the barricades in defense of their full two-weeks'-pay Easter bonus, for instance, but somehow I don't feel like joining them on that one.

Greek governments put themselves in this predicament by behaving like capitalists. They bet on economic growth by borrowing money, but found themselves short when the global economy struggled. As usual, capitalists elsewhere invested in Greek debt when it looked like a safe proposition, so just as with the bust of the U.S. housing bubble, a local crisis has become a global one, much of yesterday's Wall Street panic reportedly being caused by events in Greece and Europe. Call me risk-averse if you must, but capitalists have got to find more sensible or just plain safer ways of doing business with each other. Reform of regulation of capitalism should come with any bailout or austerity plans anywhere, but they can't be a substitute for austerity everywhere.

As long as people still have to pay for things with money, and as long as money remains a limited resource, nations as well as people have some responsibility to live within their means, and that includes retrenching when your means are short. I might accept that some government services are so essential that they shouldn't be based on cash exchanges or subject to fluctuations in cash resources, but it just makes sense that times will come when governments will have to advise people to retrench. If progressives around the world believe that there should always be more for the masses, and never less, then they live in a fairyland.

I've suspected that one legitimate critique of the "left" by the "right" is the charge that encouraging dependence on the state leaves individuals and families, as well as the state, ill-equipped to deal with adversity. I don't think it's a decisive critique, and it's one that the left ought to be able to find ways to answer. For instance, a true socialist ought to reject the model of dependence on the state, which can just as easily be encouraged by conservative or capitalist regimes, in favor of the responsibility that comes with actual workers' control of government and society. But that responsibility should include a readiness to acknowledge that circumstances can arise, not caused by someone's greed, that may require everyone to tighten their belts for a time. Natural disasters or defense against invasion come to mind as cases when retrenchment or austerity may become necessity. Mistakes by government, as in Greece's case, are another category. A properly educated citizenry should not react to such crises as if the end of the world were nigh. Nor should they insist on an unsustainable "not one step back" principle regarding pay for public workers or funding for social programs. At the same time, people might not panic so readily if governments would make clear that no proposed retrenchment is permanent. If we're asked to tighten our belts in bad times, we ought to get bigger belts in better times. The main point people should learn is that social justice is no guarantee against adversity -- and it can only help if everyone can see that austerity is shared across the board.

I don't claim to know enough about the Greek situation to tell either the government or the people what to do. But the news from Greece has had me thinking about the general issues involved, especially because it could be other countries' turn at austerity soon. The country regarded as the cradle of democracy may be setting precedents for the rest of the world again.

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