The working-class case against the EU
From Socialism Today, the monthly magazine of the Socialist Party England and Wales
The latest book by Yanis Varoufakis exposes the role of the EU in destroying Greece’s economy and tearing apart its social fabric by imposing savage austerity. Yet, he concludes that the reform of EU institutions is the answer. HANNAH SELL explains why this is a non-starter, and why international workers’ struggle is the only solution.
And The Weak Must Suffer What They Must?
By Yanis Varoufakis
Published by Bodley Head (2016), £16.99
“Greece is running out of money. The government in Athens is raiding the budgets of the health service and public utilities to pay salaries and pensions. Without fresh financial support it will struggle to make a debt payment due in July. No, this is not a piece from the summer of 2015 reprinted by mistake. Greece, after a spell out of the limelight, is back. Another summer of threats, brinkmanship and all-night summits looms”. (Larry Elliott, The Guardian, 30 April) Far from having being resolved, Greece is reaching another crisis point with Grexit from the eurozone back on the agenda. Greek workers are again taking to the streets in general strike action against vicious austerity – now being implemented by the Syriza government.
Doubtless, many anti-austerity activists looking for a solution to Greece’s misery will turn to the recent book by the ex-finance minister of Greece, Yanis Varoufakis, And The Weak Suffer What They Must? Varoufakis recognises the role of the EU in causing the people’s suffering, describing “the crushing in July 2015 of the Greek government”. However, he does not explain how the Syriza government could have defied the troika – the European Commission, European Central Bank and the International Monetary Fund. Instead, this book fits with his previous claim (Guardian, 18 February 2015) that his role was to “try and save European capitalism from itself”, by putting forward proposals for the reform of the capitalist EU. (See: Greece – Erratic Marxism Is Not The Answer, Peter Taaffe, Socialism Today No.187)
Throughout the book Varoufakis gives the impression that, if only he could have got the institutions to listen, the EU could have been transformed into a just institution. At one stage, he describes John Maynard Keynes negotiating for an enfeebled British capitalism in the 1944 Bretton Woods talks on the financial framework for post-war capitalism. According to Varoufakis, Keynes “brought with him a razor-sharp perception of capitalism’s ways, a unique grasp of the economic forces that caused the great depression, a splendid plan to refashion global finance and, last but not least, a poet’s way with words and a novelist’s talent for narrative”. As he describes Keynes’s defeat at the hands of the US super-power’s negotiators there is little doubt he is drawing a comparison with his own (heroic, as he sees it) role in taking on the institutions of the EU with the ‘power of reason’.
Despite his defeat at the hands of the EU, which he has described in the Herald, Scotland (12 March), as “a failed organisation and a cesspool of anti-democratic forces”, Varoufakis is strongly in favour of remaining in and attempting to reform it. He is touring Britain in the run-up to the EU referendum arguing for a remain vote. However, he gives no clue as to how reform is possible, other than saying that “only serious dialogue and a readiness to return to the drawing board can mend the fences on which peace and prosperity must rely”. Yet his own experience as Greece’s finance minister is a clear indication that the institutions of the EU are not only unprepared to engage with forces opposing austerity but, on the contrary, are determined to crush them. His negotiations led to what Varoufakis aptly called “a modern day treaty of Versailles” in order to cow the fighting spirit of workers not just in Greece but continent-wide.
The sinking EU ship
Paul Mason, reviewing the book along with Thomas Piketty’s latest work, accurately sums up Varoufakis’s approach: “He concludes his book with an outline of his current project: to democratise Europe within ten years or let the project lapse”. Mason continues: “Both men [Piketty and Varoufakis] effectively site themselves, and the leftism they support, as the last defenders of the true ideal: a social Europe, reflecting the democratic values of its founding nations. Ranged against them are two forces: paralysed liberalism, whose economic remedies no longer work; and right-wing xenophobia, whose economic remedies are incoherent but persuasive”.
Yet a ‘social Europe’ has never been more than a fig leaf to disguise the real character of the EU: an agreement between the different capitalist classes of Europe in order to create the largest possible market within which they can maximise their profits. Today, after the experiences of Greece, Ireland, Portugal and other countries, combined with the succession of neoliberal treaties agreed by the EU, the fig leaf has only a few remaining tatters.
So Paul Mason is rightly sceptical of Varoufakis’s prospects for success, seeing the breakup of the EU on the agenda and concluding that “the problem is the ship is sinking”. Therefore, “the logical thing to do is to man the lifeboats”. Unfortunately, however, Mason has refused to call for workers in Britain to leave the sinking ship by voting for Brexit because he believes that to do so would allow Boris Johnson (ex-mayor of London) and Michael Gove (justice minister), “to turn Britain into a neoliberal fantasy land”. Mason understands more than Varoufakis, but his approach suffers from some of the same fundamental problems. He is waiting for some future point – when the time is right – to argue what he accepts is a correct case for Brexit. However, it never advances the struggle against capitalism to argue for a position which is objectively against the interests of the majority – the working class – because of subjective fears that they are not ‘ready’ to hear it. One of the first rules for Marxists is to tell the working class the truth.
This was not the approach taken by Varoufakis when he was Greece’s finance minister. Once he had resigned, he said of his meetings with the Eurogroup: “You put forward an argument that you’ve really worked on, to make sure it’s logically coherent, and you’re just faced with blank stares. It is as if you haven’t spoken. What you say is independent of what they say. You might as well have sung the Swedish national anthem – you’d have got the same reply”. (New Statesman, 13 July 2015)
Yet, in office, he and prime minister Alexis Tsipras spun a different tale. When the first deal was struck on 20 February 2015, which tied the Syriza government to the EU’s austerity framework, Varoufakis described it as “pivotal”, and based on “genuine negotiations” in a “relationship of equals”. It is possible that the newly elected Greek government had no choice but to agree harsh terms at that point in time, while it prepared for a struggle against the institutions of the EU. However, by covering up the reality of the situation – not only then but throughout the negotiations – they left the working class ill-prepared for what was to come. Despite this, the Greek working class heroically showed their willingness to defy the troika.
Letting the right-wing off the hook
In Britain a powerful workers’ movement campaign that opposed the EU would transform the political situation. By remaining silent – as Paul Mason recommends – it increases the danger that ‘right-wing xenophobia’ will gain from anger at the undemocratic EU. Similarly, by expending his energy trying to convince the institutions of the EU, and effectively acting to disguise their real role, Varoufakis and his ilk create the conditions for the rise of the far-right and right-wing populist forces in Europe that they fear.
Imagine if Jeremy Corbyn had withstood pressure from the Blairites to campaign for remain and had put a case for an anti-austerity, internationalist exit vote. It would have transformed the parameters of the debate – now dominated by pro-capitalist forces on both sides – and would have increased the prospect of exit winning. Far from the Tory right being free to turn Britain into a neoliberal fantasy land, the prospect of a Corbyn-led Labour Party coming to power would have been posed. Even without this, it is ludicrous to imagine that the Tory right will have a free run if Brexit wins the referendum. Not for nothing does Tory Brexiter, Jacob Rees-Mogg draw a comparison between the current crisis in the Tory party and the 19th century split over the Corn Laws: “That rift kept the party out of majority office for 28 years”. (Financial Times, 17 May) Rees-Mogg is desperately trying to warn against a split in his party because of the potentially dire consequences for British capitalism.
He understands that if Johnson were to become prime minister it would be against the background of a potentially fatal crisis in the Tory party. He knows Johnson would face trenchant opposition from the Cameron wing. For that reason he appeals to the Tory backbenches to leave David Cameron in place if Brexit wins, but this is almost certainly utopian. Cameron’s eviction would be virtually certain following a vote for Brexit, and the resulting turmoil in the Tory party would give the working class an important opportunity to defeat the Tories’ austerity agenda.
Unfortunately, however, neither Paul Mason nor Yanis Varoufakis seriously factor in the role of the working-class struggle in their analysis of events. Mason at least comments on it, and is sometimes inspired by it, but is pessimistic about its ability to affect events either today or in the future. The working class and mass struggle of any sort are completely absent from Varoufakis’s book.
This is true in reference to historical examples but also more recent events. Varoufakis spends some time on the downfall of Margaret Thatcher, for example, but makes no mention of the role played by the 18-million-strong mass non-payment movement against the poll tax (led by the Militant, predecessor of the Socialist Party) which was central to her being forced out of office. More shockingly, the role of the heroic Greek masses is not even worthy of a footnote in Varoufakis’s eyes. Their 30-plus general strikes against austerity are not even mentioned.
Instead, he concludes about the events of July 2015: “The Eurogroup had succeeded in overthrowing our government by asphyxiating us enough for prime minister Tsipras to surrender… our society lost its will to reform itself and, most seriously, European democracy was wounded deeply”. As if society as a whole behaved no differently to the Tsipras government! Nothing could be further from the truth. Greek society – primarily the working class and poor – showed its willingness to defy the Eurogroup when they voted ‘oxi’ (no) in the referendum on the troika’s austerity programme. There was nothing necessary or automatic in Tsipras’s decision to surrender to the Eurogroup. Nor, as Varoufakis’s own description of the EU institutions confirms, was it a question of damaging ‘European democracy’, but rather of laying bare the undemocratic character of the EU.
Varoufakis has described himself as an ‘erratic Marxist’ but there is little or no Marxism, however erratic, in this book. Karl Marx’s starting point was a study of the actual reality of capitalism, from which he was able to draw general conclusions about how it operated and, crucially, could be overthrown. One of the fundamental contradictions of capitalism which Marx elucidated was its foundation on the basis of nation states, on the one hand, and the development of the world market, on the other. Despite the degree of globalisation that took place in the decades before 2008, capitalism was unable to free itself from its national ties. For Varoufakis however, this and other contradictions of capitalism can be overcome by the strength of reasoned argument.
A utopian view
After a long first section of the book giving Varoufakis’s take on the history of the formation of the EU, particularly its relations with the US, Varoufakis moves on to the crisis in the EU since 2008 and his (limited and quite vague) ideas for solving it. His central demand is for “a proper political surplus recycling mechanism”. This idea – a ‘transfer union’ or similar – has been raised by others including the governor of the Bank of England, Mark Carney. He has called on the eurozone countries to allow cross-border transfers of tax revenue so that resources can be shifted from richer to poorer countries. However, it is intransigently opposed by Germany, the Netherlands and other richer members. Varoufakis recognises this but does not understand why. He asks: “The big question here is: why? Why reject the political surplus recycling that is, as the United States realised in the 1940s, essential to maintaining an asymmetric monetary union?”
Varoufakis does not take into account the different world balance of forces after world war two, with victorious Stalinism, a systemic threat to capitalism in Europe, acting as a glue to hold the western capitalist powers together. He also does not understand the difference between the US, a federal nation state, and the eurozone, a collection of different nations with a common currency. Whereas a federal nation state can redistribute funds relatively easily, it is not possible in the same way in the eurozone, where the capitalist classes of the different nations have conflicting interests. Even in the period of globalisation that preceded the 2008 crisis, despite all the pressures on the capitalist classes of Europe to club together in order to compete more effectively with the US, and more recently China, they were not able to overcome the barriers of the nation state. While the productive forces had massively outgrown national and, to some degree, even continental boundaries, capitalism remained based on nations which are not only economic units but also political and social entities.
Even in a time of boom the European capitalists could be described as being forcibly chained together – while trading blows as their national interests clashed. In this situation the adoption of the euro as a common currency was bound to lead to an enormous exacerbation of the EU’s problems. Now world and European capitalism has entered crisis, the blows being traded have become much more intense, as the neo-colonial treatment of Greece graphically demonstrates. The factors pushing the European capitalists together are still there and mean they will continue to fight to save the eurozone. At a certain point, however, the centrifugal forces will become so great that the eurozone and even the EU are likely to fracture.
Yet, Varoufakis imagines that capitalism is capable of overcoming the limits of the nation states just by willing it. He argues for “forging an overarching European identity that incorporates but does not usurp their separate national identities”. He draws no distinction between existing nation states and the EU: “If a joint European identity and a sense of supranational belonging is impossible, the European Union ought to be disbanded and Scots and Catalans should also be granted independence from London and Madrid. On the other hand, if a supranational European identity is possible and capable of generating a European sovereign people, then a democratic European Union is possible”.
Varoufakis is on record – correctly – as supporting the right to self-determination, including independence, for both Scotland and Catalonia. But he is wrong to link this to his utopian notion of a capitalist, democratic EU. Only on the basis of breaking with capitalism and beginning to develop a socialist planned economy will it be possible to develop a genuinely democratic federation of Europe with full rights of self-determination for all nationalities, probably initially based on a confederation of independent socialist states.
In the immediate aftermath of the 1917 Russian revolution – the first time the working class broke with capitalism – the new democratic workers’ state was able to break down the walls of tsarist Russia’s ‘prison house of nations’. It began to build the Soviet Socialist Federative Republic which gave freedom to many oppressed nationalities for the first time. This history has since been buried under Stalinism’s crimes against oppressed peoples but it remains an important indication of what would be possible on the basis of breaking with capitalism.
Capitalist states
Capitalism has never been less capable of either meeting peoples’ demands for national liberation or of creating new independent and prosperous nations than it is today. On the contrary, the examples of Scotland and Catalonia show how centrifugal forces are applying pressure not only between EU countries, but also within them. This is an indication of the increasingly crisis-ridden character of capitalism. Britain was a pioneer of capitalism and went on to become the most powerful imperialist country on the planet. At the dawn of British capitalism, in 1707, the Act of Union bound Scotland and England together on the basis of the brutal repression of the Scottish people, most of whom opposed the union. Over time, however, Scotland was at the centre of British capitalism’s development as the ‘workshop of the world’. By the 1880s, for example, 85% of Britain’s pig iron was produced in Scotland.
While a Scottish consciousness always existed among the working class, albeit combined with a British consciousness for a period, the ruling class in Scotland became completely integrated into the capitalist class of Britain. Today, although there is a section of Scottish capitalists who support independence, British capitalism as a whole is completely opposed, viewing such a development as a further major step in Britain’s decline. As do the capitalist classes of other European countries, not least Spain, who fear that Scottish independence would give unstoppable momentum to struggles by minorities for self-determination within their own states.
Nonetheless, the crisis of British capitalism, combined with the brutal policies carried out by Tory governments on the Scottish working class, have created strong support for independence among growing numbers of working-class people. There is no comparison between Britain – with one capitalist class overwhelmingly unified in opposing independence for Scotland – and the EU, which has 28 capitalist classes all with their own interests.
Varoufakis however believes that capitalism is capable of unifying them. He asserts: “The 19th century is brimming with examples of how commodification, the triumph of capital accumulation over feudal authority and the concomitant removal of internal borders put into the blender of identity creation a variety of regional characters to construct new national identities. German unification, effected by Prussia’s iron hand, is an excellent example. The notion that economic union could one day spawn a European identity, a ‘We, the people of Europe…’ is neither far-fetched nor unwholesome”. Incredibly, he adds: “The great hope among European democrats was that democracy would slip inconspicuously into the European Union exactly as it had into the institutions of nation states such as Britain and France”.
Democracy did not ‘slip into’ Britain or France. Capitalist democracy was won in both countries on the basis of revolution and civil war – much as the capitalists would like to forget that now. In the first period of its development capitalism played a historically progressive role in overthrowing feudalism and carrying out the tasks of the capitalist democratic revolution, including the establishment of nation states. Led by the nascent capitalist class, revolutionary movements, drawing the oppressed masses behind them, fought for national liberation. As capitalism became established, however, this changed.
For capitalist classes that came onto the scene of history later, their fear that movements of the working class and oppressed would threaten their own rule was far greater than their drive to fulfil their historical role in establishing modern nation states. This was the case even 170 years ago, when capitalism was still on the rise. In the revolutions of 1848, for example, the capitalist class in Germany, in the form of the Frankfurt Assembly, did not dare to take the revolutionary steps needed to create a unified state from the various feudal fiefdoms that made up what is now Germany. This was in a situation where there was a clear national consciousness, common language and culture – very different to the EU today. The Frankfurt Assembly was defeated, and German unification was carried out decades later – by ‘Prussia’s iron hand’. The result was not capitalist democracy but an absolutist monarchy, in which parliament (the Reichstag) had only token powers.
International workers’ struggle
While socialists can use the European parliament as a platform to raise the voice of the working class, it has extremely minimal powers. Varoufakis recognises this but does not explain how it could be changed. Power in the EU currently resides ultimately with the European Council, the heads of government of the capitalist nation states of the EU. They have no interest in handing any further powers to the European parliament. It is indeed true that a Europe-wide mass movement to demand more power for the parliament, if it was powerful enough, could force them to make some concessions in that direction against their interests. But if such a movement was to take place it would be very unlikely to stop at that demand. It would go on to fight for the overturn of all the capitalist governments of Europe and for the development of a socialist continent-wide collaboration.
At the present time, however, movements across Europe are not emblazoning the demand for more power to the European parliament on their banner. On the contrary, as the recent referendum result in the Netherlands indicated, there is a growing mood of anger at the EU. This is no surprise when government after government – from Greece to Ireland – claim that they have no choice but to institute vicious austerity because of EU regulations and treaties. In this situation, for socialists to be defenders of the EU is to leave a vacuum which the far-right can attempt to fill. Of course, we do not accept that governments have to implement austerity, not because their description of EU diktats is inaccurate, but because they can choose to defy them!
If last summer the Syriza government had shown the same courage as the Greek people, and defied the attempts by the EU to crush them, it would have resulted in Greece being thrown out of the eurozone, possibly even the EU. Had it reacted to this with a socialist programme, it could have begun to alleviate the suffering of the Greek people, and would have inspired workers and young people across Europe. A socialist plan would have included refusing to pay the debts, nationalising the banks and introducing capital and trade controls immediately. But it would have had to go further than that. An emergency programme to save Greece would mean bringing all major companies into democratic public ownership, alongside an urgent plan of public works to rebuild the infrastructure of transport, hospitals and housing, among others, and to redevelop the devastated economy.
Instead of taking this road, the Syriza government capitulated. Even so, the Greek debt is completely unpayable, no matter how much misery is endured, and Greece’s eviction from the eurozone is posed once again. The brutal lessons of the last year show that Varoufakis’s dream of reforming the EU is a chimera. The increased workers’ struggle across the continent against capitalist austerity – including the defeat of the water charges in Ireland and the movement shaking François Hollande’s government in France – also show the potential of building a movement to fight for a real democratic Europe – on the basis of socialism.
