A battle in a long war

Beyond the resounding victory of the NO vote in the Greek referendum, analysts say it will not be easy to break the matrix of neoliberal thought that has become established in Europe through sixty years of collective work. Spanish.

Roberto Lampa
13 July 2015

Alexis Tsipras. Flickr. Some rights reserved.

The European political and economic landscape reveals an apparent paradox: despite the increasing depth of the crisis that began in 2008, the neoliberal agenda continues to exert its hegemony in public debate and to determine the decisions of those responsible for economic policies. Some recent events show the increasing intensity of this phenomenon.

An example of this is the aggressive attitude shown by all the European countries (and even more so the peripheral countries) towards Greece. Not only have they harshly rejected all Greek proposals, including the more conciliatory ones  in partial favour of an adjustment, but on several occasions they have even felt entitled to ridicule the economic theory behind them. On April 24 the Eurogroup finance ministers publicly humiliated the Greek finance minister and renowned unorthodox economist Yanis Varoufakis. According to the Bloomberg agency, the Dutch Eurogroup chairman Jeroen Dijsselbloem attacked Varoufakis calling him "a lazy dilettante and gambler" and tried to impose on Prime Minister Alexis Tsipras the need to add two additional members to the Greek delegation who would act as the minister’s "tutors". Such is the attitude that has characterized European institutions throughout the complex negotiations on Greek debt.

Second, the fierce confrontation between the Italian finance minister, Pier Carlo Padoan, and his country’s Constitutional Court is striking. The dispute arose after the Italian courts ruled against blocking the automatic update of pensions (decided in 2011 by Mario Monti’s government and upheld by the governments of Enrico Letta and Matteo Renzi) and enforced  a retroactive compensation to pensioners of about five billion Euros. Rather than acknowledging the serious abuse by the government and accepting the ruling of the constitutional court, Padoan wrote a very harsh letter to the judges in which he literally said that "if court rulings have implications for the public finances, the court must carefully assess their impact before giving a verdict”. In other words, according to the former OECD researcher, there are principles that outweigh the 1948 Costituzione: namely the sacred notion of austerity and the budgetary golden rule. What is striking is that the minister’s bizarre legal perspective was not only not rejected for its obvious anti-democratic nature, but was adopted immediately: the judges themselves, in a subsequent and similar ruling on the blocking of state employees salaries (which would have involved a refund of some 38 billion euros), confirmed the unconstitutionality of the principle but, this time, without any obliged compensation on the part of the Renzi government.

Leaving aside simple optimism, an analysis of the European case thus leads to the conclusion that not only has the balance of power (between and within countries) failed to undergo a minimum of change since 2008, but the very few signs of departure from the dominant paradigm have been marginalized or ridiculed. How to make sense of these reactions, then, in the light of the social tragedy that is consuming the Old Continent?

A coherent answer to this question should take into account the misunderstandings and oversmplifactions that have so far characterized the analyses by unorthodox economists of the complex phenomenon of neo-liberalism.

First of all, we should remember that neo-liberalism rose out of the defeat of the old European ruling class and of classical liberal thought following the Second World War. This led to the need for a thorough review of the political and economic paradigm which was undertaken by some 36 intellectuals, members of the Mont Pelerin Society, who organized themselves in 1947 as a vigorous, counter-hegemonic movement in the fields of government, academia and the media. In other words, neoliberalism is a very European ideology, driven by very Europen problems.

Second, we should not confuse the ends of neo-liberalism (all-powerful markets, deregulation) with the means to achieve them. Neo-liberal society does not arise, in Europe or anywhere else in the world, as a natural product or a spontaneous order but as a result of massive, albeit perverse, state intervention, a thorough reform of the rules of governance and especially the creation of supra-national institutions. In other words, neo-liberalism as we know it today is the artificial product of sixty years of collective work and proactive intervention, both public and private. To imagine that it is possible to do away with it via a change of government or simply as the result of a crisis, even a deep one, is to underestimate the size of the tremendous defeat that the European ruling classes have inflicted on workers during the last six decades.



This article was published for the first time in Página12, Buenos Aires.

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