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'Going for growth' will bring new attacks

If Europe’s voters think “austerity” is bad for their health, it’s nothing compared to what some of the advocates of “growth” have in mind as the next stage of the crisis unfolds.

People like Mario Draghi, president of the European Central Bank, know all too well that providing trillions of euros in cheap loans to banks has not led to increased lending.

The eurozone is firmly in recession so plan B is on the agenda. As far as Draghi is concerned, the aim is “structural reforms” like “labour-market flexibility” and increased competitiveness through speed up and lower wages.

In other words, living standards have to be driven down faster and further for there to be any chance of the eurozone coming out of recession.

What Draghi’s plan confirms is that the crisis has entered a new, more dangerous phase – economically and politically. The deadlock is absolutely clear in Greece.

The rejection of the draconian EU-IMF bail-out terms in the Greek election cannot be satisfied by any political deals amongst the minority left parties. Demands by Alexis Tsipras, leader of the Syriza party to tear up the deal cannot be met because the global capitalist economy is imploding.

Some like to say that “austerity isn’t working” and should be abandoned in favour of growth. The Guardian’s Seamus Milne remarks:

Cutting jobs and pay while increasing taxes isn't reducing borrowing and debt, let alone leading to economic recovery. It's deepening recession, increasing debt and destroying jobs and squeezing living standards across the eurozone – in countries such as Spain and Greece, catastrophically – as well as in Britain.

This is stating the blindingly obvious but ignores a salient fact. Forced to contract by its own logic, capitalism is beyond the control of any political initiative that leaves the system intact.

The reality is “going for growth” just means moving to the next stage of a brutal contraction that will see workers sacked, factories closed, shutting down unprofitable production, driving up rates of exploitation.

New measures by the Con Dem coalition in the Queen’s speech like reducing public sector pensions and making it easier to sack workers, are part of this process.

The scale of what has to come if the current system is to survive is too terrible to contemplate. Attention must now turn to the means by which a new system can be created.

The interdependence of politics and economics rules out talk of a new direction for the economic system without a new political arrangement that removes the power of global corporations to dictate to governments.

Seismic shifts in electoral results in Europe follow on from mass movements in North Africa and the Middle East which have toppled regimes that ruled throughout the latter part of the twentieth century.

With unemployment soaring, anger cannot be contained and will explode on the streets throughout Europe in the coming months.     

Replacing a bankrupt for-profit system with new forms of common ownership can only be carried out by new political formations, not co-existing with the world of capitalist corporations and global financial institutions, but challenging and replacing them.  

People’s assemblies, where everyone participates in the decision-making, can take the place of a five-yearly cycle of voting for representatives who immediately become subjects of capital.

A global network of people’s assemblies can establish democratic control over the financial and productive resources of the world, protecting them against the threat of destruction, turning them to the satisfaction of need. 

We should not ignore the other message from Greece, where an openly fascist party won 20 seats in parliament. People’s assemblies have to become the future shape of democracy because the old political order is crumbling but does not intend to go quietly.

Gerry Gold
Economics editor
9 May 2012

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