by Ramin Mazaheri
“The Euro”, both the monetary system and the book of the same name by Nobel-Prize winning economist Joseph Stiglitz, can appear complicated.
Take heart from Noam Chomsky, who wrote that nothing in the social sciences cannot be understood by the average bus driver in a couple of minutes – this is not calculus or physics, after all.
Give me just three paragraphs to simplify everything:
Stiglitz successfully makes two indisputable academic assertions: The euro has failed in its promise to bring about prosperity and security, and that there is nothing in its organizational structure which allows for the possibility for change.
Take a moment and realize these do not constitute an attack on the euro – these are clear facts, the former of which is clear to anyone. You’ll have to take his academic word for the latter assertion, unless perusing the euro’s structure is your idea of a fun Saturday night.
After covering the entirety of the Eurozone crisis from France, it is impossible to refute my assertions that the Eurozone has failed to bring about prosperity and security for the average Frenchman, and that there is nothing in the mainstream political structure which allows for the possibility for change.
Trust us. The first part is the main part, anyway.
I thought I’d revisit Stiglitz’s book, seeing as how the National Front’s Marine Le Pen may win the presidency in a few months largely thanks to her promise to leave the euro.
It’s vital to realize that it is not just right-wing ignoramuses like me and Le Pen who want out of the Eurozone – a mainstream, Nobel Prize-winning economist has reached the same conclusion. What I am saying here is: You don’t have to agree with us, but you cannot denigrate euro-exiters by calling us stupid or racist like you did Brexiters or Trumpers – at some point you have to openly debate.
“The Euro” is very good and worth reading. If you want know the truth about the Eurozone, read the analysis of someone who has no personal stake in it, like Stiglitz.
But believing that the euro should continue should be referred to as “Islamic market fundamentalism”, not because it has one single thing to do with Islam, but because then it would hit home with the average Westerner just how fanatical “market fundamentalism”, or “neoliberalism” truly is.
Such a term should make the deranged ideological basis of the Eurozone crystal-clear: Neoliberals are not at all constrained by the facts of 25 years of failure in Africa, a lost decade in Latin America, and nearly-lost decade in the Eurozone – Stiglitz makes this point repeatedly throughout the book.
What Stiglitz fails to do is to point out that the simple root of the Eurozone is capitalism and that this is the ideology which must be questioned, not simply its capitalist variant of neoliberalism.
I can easily relay a bunch of his facts, combine them with my on-the-ground experiences and convincingly make the urgent case that the Eurozone is flawed and must be abandoned or replaced.
But this is not that column.
I want this column to be about something else, and I will get right to the heart of the matter:
Stiglitz is about as leftist an economist as the mainstream media is permitted to report on.
That is why my headline calls him a “fake leftist”- I don’t think any economist would call him a “leftist economist”, but for all intents and purposes he is as economically left as the average person can find without caring enough to dig deeper.
Stiglitz is on the left of the right-wing; which makes him a centrist-tending-right. That he is consistently presented as a “progressive” economist is the mistake this column seeks to make right.
And like so many “progressives” who fall short of real leftism, even Stiglitz cannot believe his own eyes or his own words.
Fake progressives always let them off the hook
So many times in “The Euro” Stiglitz delivers a devastating conclusion about capitalism, only to immediately lets it off the hook by claiming bafflement as to how this could possibly happen. This failure is intellectually indefensible, intellectually unsatisfying, regressive and violently damaging. This passage is, unfortunately, typical.
“Austerity has always and everywhere had the contractionary effects observed in Europe: the greater the austerity, the greater the economic contraction. Why the Troika would have thought that this time in Europe it would be different is mystifying.”
It is not mystifying – this is what capitalism does over and over. Just as they sought in Africa and Latin America, neoliberals want to impose labor code rollbacks and deregulate; in Europe they wanted to end the gains Europeans have fought decades to win. It has worked in France – Hollande rammed through the “Macron Law” last year despite mass protests, and he arrested thousands of demonstrators to achieve it.
Time after time Stiglitz presents a devastating indictment which totally attacks the premise that capitalism is concerned with good governance and promoting even basic equality, only to soft-pedal backwards.
“But the eurozone programs have been a success, in the sense that the German and French banks have been repaid….Perhaps the real goals of Germany and the other creditor countries have indeed been achieved.”
For those not following Europe closely, this is exactly what has happened since the European Sovereign Debt Crisis began and why people have lost faith in the Eurozone: the rich countries of France, the Netherlands and Germany have no solidarity with the average Eurozone citizen at all (which is endemic in capitalism), and are ruthlessly waging economic colonization against the poorer nations (which is endemic in capitalism). It is the banks of France and Germany which have been bailed out, not the average indebted person in Greece or Finland, as Stiglitz repeatedly proves.
Spain and Ireland didn’t even need a bailout in 2009: They had a fiscal surplus and healthy debt-to-GDP ratios, but not anymore. Greece is now actually running a fiscal surplus! No matter – they are slated to be paying back banks further west and north for perhaps decades.
Stiglitz says these things, backed by academic facts, all the time in his book.
And yet with that seemingly ironic “perhaps the real goals” statement –a question mark is missing, which must be a grammatical error because it is clearly a question – Stiglitz simply ends the matter and moves on to a new topic. Tellingly, it is “The Need for Growth”.
Perhaps if Stiglitz were not trapped by capitalist ideology, by capitalism’s obsession with growth, he could have pursued his own hypothesis (which matches with reality) even further. But he didn’t, he dropped the potato once it got hot, or he doesn’t realize he has a capitalist-programmed obsession with “growth”.
“A cynic might say that this was the intent of the law: to preserve power relations. But I am convinced that the rule in Europe was driven more by ideology and misguided economic beliefs than narrow self- interest.”
It is not at all cynical to say that capitalists in the Eurozone have not yet rectified a long-standing criticism by the left: that capitalism needlessly and inefficiently promotes international competition and imperialistic rivalries. Leftists have said this for decades, are saying it now, and will say it forever until 1) capitalism stops doing it, which they won’t (can’t) or 2) capitalism finds a solution to this problem, which they can’t (won’t).
Either Stiglitz, with all of his honorary degrees, has not read basic leftist economist thought, or he has forgotten it, or he has ignored it in the confirmation bias of his definitely non-progressive adoration of capitalism.
Like all capitalist promoters, and like all mainstream media members who live in a 24-hour news cycle, instead of taking a longer view Stiglitz is guilty of viewing the Eurozone as some sort of isolated case in capitalism when the moment arrives from clear conclusions and logical condemnation. He remains in his ivory tower, and his telescope does not take in the full historical view.
“Its construction (the ECB) was based on ideological propositions that were fashionable at the time (Stiglitz is discussing the ECB’s mandate, which is limited to only inflation, and not growth, employment, etc.) These beliefs, however, are increasingly questioned, especially in the aftermath of the 2008 global financial crisis.”
An obsession with inflation is not a “fashion”: this is a fundamental concern of capitalism throughout its history. Why? Inflation is called “the great leveler” for a reason – it reduces the values of the most immense fortunes. The rich have far more to lose than anyone else from inflation!
It also reduces debts, so God send us inflation! At least for the poor debtors, who will be able to pay off their burden and stop being tortured.
Inflation also reduces the power of interest – without that power, bankers/moneylenders will have to actually work for a living, which is why they fear it so.
Finally, lacking the stability provided by communistic cooperation, an inflation-induced downturn also spells chaos, and that could force a revolution and compel the wealthy to flee to some other country with only a part of their ill-gotten gains (see revolutions in Russia, China, Cuba and Iran for examples).
Stiglitz knows that for all these reasons an obsession with inflation is fundamental, not fashionable.
“The dismal (economic) forecasts made it clear: the Troika’s grasp of the underlying economics was abysmal”.
Really? All those eggheads with their salaries so much bigger than mine don’t understand their own domain?
The problem here is not that people with a PhD do not “grasp” their own field – the problem is their ideology.
It is not a conspiracy of stupidity or a confederacy of dunces – it’s the promotion of capitalism over communism.
The ideology of communism shows clearly that the Eurozone was indeed a conspiracy – a money-lending cartel on the grandest scope. And why would such a scope be out of the reach of banks whose yearly gross corporate product can exceed half of all nations in the world?
Stiglitz says that from 1999-2007 the Eurozone had a short period of success – “divergence reigned” – i.e., rich countries loaned to poor Eurozone members (economic redistribution). But what happened is those loans were called in during a crisis, and they could not be repaid.
We know that bankers routinely aim for such a scenario to happen. What happened in the Eurozone has happened all over the 3rd world during the 2+ centuries of European-led imperialism – indebted countries were picked apart by foreigners.
To say that the bankers/Eurozone planners/Troika didn’t know what they were doing is pathetic. Stiglitz has too much sympathy, perhaps, or not enough contempt for negligence.
“Was it just an accident, a slip, that they opted for a property tax that would have inflicted pain on ordinary Greeks, rather than one that would have hit the oligarchs?”
This is – somehow – an honest question from Stiglitz, and a less ideologically-rigorous reader will be lulled into complacency and sympathy for those who are orchestrating the re-colonization of Greece.
Stiglitz poses the question but he never takes a stand. This is as far as a person like him is willing to go – fake leftism. The leftism that nobody wants to associate with. The leftism that loses. The leftism that embarrasses leftists to say that they are leftists.
To take a stand would force Stiglitz to change his fundamentally pro-capitalist view, and it would risk all those honorary degrees. (I have a t-shirt which reads “Where’s my bailout?”. Where’s my honorary degree, huh? Hundreds of unpopular leftist reports and French tear gas attacks don’t cut it, eh?)
For those who do go further we conclude: “No, it was not an accident! It happens all the time. Such pro-oligarchy decisions are routine in capitalism. This is just one measly little example you have publicized and you haven’t even interpreted it correctly, Dr. Stiglitz, PhD, Esq, Rev., DDS,!”
Why care about ‘alternative facts’ when ideology is neglected?
Facts don’t matter because in the social sciences ideology filters everything, people. Again, this is not calculus or physics – if it was, then economic policy wouldn’t be disputed and austerity wouldn’t still be reigning.
The capitalists have an ideology and they won’t call it “Islamic market fundamentalism” so they call it “neoliberalism”, and it is the foundation of the Eurozone.
You want to be a capitalist and not an “Islamic market fundamentalist”, you complain? The Eurozone is necessary, you say?
Fine. Let’s judge the Eurozone on your own neoliberal terms: As a capitalist you obviously accept that economic downturns and depressions are simply a part of life, and you are willing to make everyone suffer the consequences.
But the judge of any capitalist policy is how long and how deep your capitalist downturns are, and by this fair gauge the EU has totally failed. This will be a lost decade. I pity the poor and unemployed youth because they are suffering for the refusal to accept the facts which impose a change of ideology.
There is an alternative to the Eurozone – it has not been decreed by God. As Stiglitz writes, monetary systems come and go. If structural limitations prevent us from changing the euro then the euro has to go.
Capitalist reader, even your emperor is cold from wearing no clothes: Germany has averaged 0.8% annual growth since 2007 – that is failure, and this is your leader and success story?
Joe oughtta know better
But Joseph Stiglitz, with all his egghead degrees that make him so much smarter than me and your regular bus driver, should know extremely well how capitalism ravages everything because isn’t he reading economic literature from the left at least some of the time?
That is not clear. But I say Stiglitz should know better because he is from Gary, Indiana, my former hometown.
Gary, if you don’t know, is the American industrial hellhole par excellence. It is the poorest, Blackest, most violent city in America, per capita. White flight, racism, capitalism, pollution, drugs, guns, blocked futures – it all the stuff nobody wants.
You cannot compare it with a stereotypical Soviet-era counterpart because there is humiliating racism, deadly violence and crack instead of vodka.
Gary truly is the foul, steel-fume belching armpit of America. Most people in nearby Chicago are too frightened to even stop there for gas…and mainstream media/politicians couldn’t care less.
Gary’s dismal past, present and future should have been enough for Stiglitz to renounce capitalism, but it wasn’t.
Like most “progressives” who do not go far enough to make any real or lasting difference, the tone throughout his book is that Stiglitz “sincerely cares”. He really, truly does and…this only makes him more enlightened than your average, selfish fascist.
Like most of his fake-leftist peers he never discusses “class”, but loves to discuss the environment. And if there was an economic component to transgender bathroom rights I’m reasonably sure Stiglitz would have focused on that as well.
He – by blinding himself to a true leftist interpretation – by being content with being “mystified” in the most non-poetic ways in the most dismal of “sciences” – he creates a false impression of what “progressive” should truly mean.
The best that such a half-hearted progressive like Stiglitz can do is provide us ammunition for the struggle – and he does in “The Euro”.
This makes him without fault, but it does not earn him great praise. Somebody in his influential position should break free of his mainstream confines and propose real solutions instead of trying to fix what he clearly knows is fundamentally broken: capitalism.
Being “mystified’ should not earn you prizes in economics – the people deserve immediate solutions.
The Euro has proven there is no “Third Way”
Urbane, cultured, human rights-loving Europe has not been able to show that one is able to combine a capitalism and communism in a capitalism-centered system.
This is exactly what the Euro was supposed to do. Capitalism is simply too strong and must be confined in a drastic manner.
The Eurozone has allowed European imperialism to turn on itself. This should be as crystal clear to you by now as it is to an increasing number of Eurozone citizens.
What is working, and even despite the global recession, is combining capitalism and communism in a communism-centered system.
China is booming; Cuba has had steady 2% growth since the Great Recession started, despite the genocidal blockade; since 1989 in Iran (communism’s ignored victory) only one country in the world has increased their Human Development Index more – South Korea.
Destroy the euro, yes, because it has been created in a way so that it is possible to reform, as Stiglitz repeatedly demonstrates. It was an economic union before there was a political union, and the pain of muddling through to finally get that political union correct is going to hurt hundreds of millions of people for decades – that price is too high.
There has to be another way, even though pro-euro people repeatedly cry TINA: There Is No Alternative. The euro was, after all, created in 1992 – the USSR was over and so was “history”. This anti-democratic philosophy has been inscribed in the euro’s genetic structure, per Stiglitz .
But the only way any pan-European project can ever possibly succeed – and Stiglitz repeatedly notes this as well – is through solidarity.
What he doesn’t say is that there is no pan-national solidarity ever in capitalism.
He holds up the US model as an example, but the US has always been, fundamentally, the same country. It’s not as if the US merged with Native American tribes or territories of freed Africans. Europe requires their own solution, not just a US copy, just as Cuba requires their own model, Iran their own model, etc.
The euro has undoubtedly decreased the sentiment of solidarity so vital to something like the euro ever having a chance of working. Greece distrusts Germany, Germany distrusts Portugal, France distrusts everybody including other Frenchmen, etc.
There can be no doubt about that. The capitalist euro project has ruined European solidarity, and I – intrepid reporter on the ground – can report to you that I see no “solidarity boom” on the horizon. I see the far-right, racism, protectionism and closing of borders. Why? Well, the euro has failed to bring about prosperity and security, dummy – you can even ask a capitalist reactionary like Stiglitz!
Modern history proves that any sort of solidarity – especially pan-national or racial – requires a commitment to communist ideology. The USSR was the only empire built on affirmative action, after all.
Communism is the only way forward, as we’ve all known for decades. The question, if there is one, is not “if” but “how much”.
Stiglitz, and his fundamentally pro-capitalist fake leftist ilk, can see that but they look away.
Ramin Mazaheri is the chief correspondent in Paris for Press TV and has lived in France since 2009. He has been a daily newspaper reporter in the US, and has reported from Cuba, Egypt, Tunisia, South Korea and elsewhere. His work has appeared in various journals, magazines and websites, as well as on radio and television.