Send a Tweet
Most Popular Choices
Share on Facebook 5 Share on Twitter 2 Printer Friendly Page More Sharing
OpEdNews Op Eds    H3'ed 10/4/16

The Poisoned Chalice: From Eurozone to Dead Zone

By       (Page 3 of 3 pages) Become a premium member to see this article and all articles as one long page.     (# of views)   1 comment
Author 79698
Message Michael Hudson
Become a Fan
  (7 fans)

What led governments (although by no means all voters) to accept a supra-national pan-European authority was the trauma of World War II. It seemed that nation-states were prone to making war, but a United States of Europe would not fight -- at least, not internally. But the authority that has been put in place is financial, pro-creditor and anti-labor, empowered to impose austerity and turn the public domain to into privatized monopolies.

The EU cannot be "fixed" by marginal reforms. Greece's treatment shows that it must be recast -- or else, countries will start leaving in order to restore parliamentary democracy and retain what remains of their sovereignty. The financial sector's ideal is for economies centrally planned by bankers, leaving no public infrastructure unappropriated. Privatized economies are to be financialized into opportunities to extract monopoly rent.

The gauntlet has been thrown down, posing a question today much like that of the 1930s: Will the alternative to austerity, debt deflation and the resulting economic breakdown be resolved by a pro-labor socialist alternative, or will it lead to a victory by anti-European right-wing parties?

What makes the situation different today is the remarkable extent to which today's European parties calling themselves Socialist, Social Democratic or Labour have accepted privatization and opposition to budget deficits. This shift reverses what they urged at their origins more than a century ago. So the problem is not only to resist the right wing of the political spectrum; it is to reconstruct a real European left.

Galbraith's book has important implications for the policies needed to save the eurozone from being turned into a dead zone along the lines of Latvia's disastrous oligarchic "success" story. (Drastic emigration and declining after-tax wages are the "Baltic Miracle" in a nutshell.)

If European Left does not succeed in creating an alternative to eurozone austerity, right-wing nationalists will lead a withdrawal campaign. Golden Dawn in Greece, France's National Front, along with Hungarian, Austrian and Polish nationalist parties and Britain's UKIP are moving to fill the vacuum left by the absence of a socialist alternative to financialization under ECB and IMF dirigisme.

Notes.

[1] My book Trade, Development and Foreign Debt (2002) reviews the German reparations debate over "capital transfers" with regard to how austerity actually reduces the ability to pay.

Next Page  1  |  2  |  3

 

Valuable 4   Must Read 3   Well Said 2  
Rate It | View Ratings

Michael Hudson Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Prof. Hudson has written the introductory chapter in "China in the Next 30 Years" and its sequel. His "Super Imperialism: The Economic Strategy of American Empire," "America's Protectionist Takeoff" and "Trade, Development and Foreign (more...)
 
Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Writers Guidelines
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEdNews Newsletter
Name
Email
   (Opens new browser window)
 

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Peter "Socialist" Schiff _ Exposed by MMT's Michael Hudson

The IMF forgives Ukraine's debt to Russia

The IMF Changes its Rules to Isolate China and Russia

If You Can't Tap Their Phone, How Do You Know Who To Shoot?

On Greece and Europe: What is Called "Negotiation" is a Demand for Total Surrender

The Poisoned Chalice: From Eurozone to Dead Zone