Holding Pattern Update Talk for Greece

8/16/2019 Holding Pattern Update Talk for Greece

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Update on the Holding Pattern

Presentations in Thessaloniki and Athens, 27–28 Nov 2015

In “The Holding Pattern” in Endnotes 3 we suggested that just as the extraordinary actions by capitaliststates since 2007 had anaged to !ree"e the de#elop ent o! the crisis$ the struggles o! 2011%201& had

beco e stalled and unable to #enture beyond the wea' unity(de!ined by anti)austerity$ anti)police$ andanti)corruption senti ents(that was established in the o#e ent o! the s*uares+ In this tal' we willre#isit so e o! those the es+

,e can loo' at the 2007-. crisis !ro two angles+ /ro one perspecti#e$ it really was the deepest crisissince the reat epression+ This was a crisis o! epic proportions+ ut !ro another perspecti#e$ the crisiswas nothing new3 it was si ply the latest in a long series+ 4ince 157&$ recessions ha#e gotten longer anddeeper$ while the phases o! growth between those crises ha#e gotten wea'er+ 4tates put echanis s in

place to anage the recurrent crises o! capital$ and these echanis s were *uic'ly set in otion$ onceagain$ in 200.+ 4tates too' on pri#ate debts as public debts$ as they had in nu erous crises be!ore$ butthis ti e on a uch larger scale6 !inancial !ir s got bailed out+ 4tates also spent oney payingune ploy ent and other bene!its$ as they had in the past$ despite !alling state re#enues+ eanwhilecentral ban's too' extraordinary easures+ They dropped interest rates to "ero percent$ essentiallyo!!ering pri#ate ban's !ree oney$ and then started directly lending to the pri#ate sector$ propping up

!ailing securities ar'ets by beco ing “dealers o! last resort”+

These actions were e!!ecti#e6 the econo y was stabilised3 the downward spiral was halted+ The problehigh)inco e countries now !aced was that their econo ies had already been growing e#er ore slowlyo#er the 80 years be!ore this crisis started+ rowth rates !ell !ro 8+& percent in the 1590s$ to 2+5 percentin the 1570s$ to 2+2 percent in the 15.0s$ to 1+. percent in the 1550s$ to 1+1 percent in the 2000s+ In order to prop up wea'ening econo ies$ go#ern ents had already gone deeply into debt in the .0s$ 50s and2000s6 they spent during the downturns but !ailed to pay down their debts during di inishing upswings+They thus went into this crisis in 2007 with #ery high debt)to) P ratios+ ebt le#els in 4pain and the:; were at &9 and 88 percent o! P respecti#ely3 ratios that rose to 5. and 50 percent in 2018+ In/rance$ the :4$ and Portugal they were already higher$ at around 9< percent o! P$ and ha#e nowreached 5


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,hy easure debts as a percentage o! P= The reason is si ple6 national go#ern ents ha#e to paytheir debts out o! taxes on total yearly inco e+ >s debt le#els rise$ a larger and larger share o! those taxre#enues ust go to paying interest on debts$ as well as paying down the principal+ 4tates are spendingtruly enor ous a ounts o! oney$ but they are doing so just in order to pre#ent econo ies !rocollapsing+ >!ter an initial period o! partial reco#ery in 2010%11$ the high)inco e countries? econo iesha#e once again been growing e#er ore slowly+ The exceptions are the :4 and :;$ where a s all

easure o! reco#ery has ta'en place$ on account o! a assi#e ca paign o! *uantitati#e easing+ @! course$this reco#ery has had little bene!it !or ost wor'ing people+ :ne ploy ent le#els re ain high3 indeed$on a global le#el the reco#ery has been largely jobless6 though the global labour !orce participation ratestabilised in 201&$ and so e countries ha#e seen a reco#ery in e ploy ent$ current IA@ projections are!or ongoing long)ter declines+ 2 >cross continental Burope and in Capan$ growth rates ha#e re ainedextre ely low or negati#e3 the latter has now been stagnant al ost a *uarter century+ >becono icsnotwithstanding$ Capan just re)entered a technical recession+ any econo ies ha#e not reco#ered pre)

200. le#els o! P3 reece?s has o! course shrun' signi!icantly+

This situation has ade the positions o! states precarious+ >!ter all$ the state?s capacity to borrow is basedon a pro ise o! !uture growth$ out o! which the state will pay its debts+ ue to a co bination o! alreadyhigh debt le#els and #ery slow growth since the crisis$ states ha#e there!ore !ound the sel#es trapped

between two opposed pressures+ @n the one hand$ go#ern ents ha#e needed to spend a lot o! oney$ andstill need to do so$ to pre#ent the recession !ro beco ing a depression+ @n the other hand$ states ha#ealready spent so uch oney o#er the past !ew decades that they ha#e #ery little le!t to gi#e+ ,e arguethat this was what deter ined the !or o! the crisis+ Det instead o! spending e#en ore oney$ whichwould ha#e been re*uired to re)in!late the econo y$ go#ern ents in the rich countries engaged in a

ca paign o! austerity+ In short$ they !ound that$ once they had bailed out the !inancial sector$ they hadlittle le!t to gi#e+ ,hile they were able !or a while to aintain spending and thus de and in the econo y$sooner rather than later these states had to start cutting bac'+ In order to show that they still had their hands on the !iscal tap(which is necessary to show their creditors that they re ain in control o! their !inances(these states announced and then initiated assi#e cuts in spending e#en as they were bailingout the ban's+

2 World Employment and Social Outlook: Trends , ILO 2015, pp. 1 !1" and World Employment and SocialOutlook, Trends 2014: Risk of a o!less Reco"ery , ILO 201#.


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@! course$ states cut spending exactly where one would expect6 on schools and hospitals$ on go#ern ente ploy ent$ and on any social spending progra es+ Thus$ !or any people$ the situation was notonly de#astating+ It was not only the case that any people !ound the sel#es without wor'3 that theelderly$ their retire ent sa#ings suddenly reduced in #alue$ had to go bac' to wor'3 that the costs o! education and healthcare rose$ just as household inco es were pinched$ and so on+ It was also$ on top o! all that$ that the go#ern ent acted in an apparently spite!ul way$ towards the population+ It appeared to

any people that go#ern ent o!!icials had lost their inds6 a!ter all$ shouldn?t they ha#e been a'ingthe ban's pay$ in order to bail out the people$ rather than the other way around= The ain explanationo!!ered at the ti e was that go#ern ents were acting irrationally+ That is to say$ states could ha#e donethe right thing$ but !or so e reason they did not+ ,hat was this reason= any people argued that stateswere acting irrationally because they had been captured by oneyed interests+ Thus go#ern ents were nolonger acting in the ser#ice o! the general interest$ but rather$ in the ser#ice o! the super rich+ e ocracyhad gi#en way to oligarchy+ It was in this way that the !or o! the crisis deter ined the o#erall !or o! the struggles o! this period6 “real de ocracy against austerity”+ Eeal de ocracy would$ according to the

logic o! the protests$ be able to !orce states to inter#ene in the interest o! the nation$ rather than in theinterests o! crony capitalists+ @! course$ once the protesters ca e together$ their struggles then e#ol#ed inore interesting ways+ >s it turned out$ it was di!!icult !or the to !ind a co on basis !or this co ing

together$ since they experienced the crisis in such di#erse ways$ so e worse than others+ eanwhile$ theter s and perspecti#es o! the old wor'ers? o#e ent were dead and gone$ and these did not re#i#ethe sel#es Fcontrary to any le!tists? hopesG+ Those perspecti#es were thus una#ailable as a eans o! uni!ying the protestors+ ,e would say$ in general$ that what we are seeing is in any ways aspontaneously e#ol#ing anti)capitalist perspecti#e$ which is not yet a co unist perspecti#e$ and whichis disconnected !ro old Ae!t histories+ In Endnotes 3 we called this the “co position proble ”6

The co position proble na es the proble o! co posing$ coordinating or uni!ying proletarian!ractions$ in the course o! their struggle+ :nli'e in the past ( or at least$ unli'e in ideal)typicalrepresentations o! the past ( it is no longer possible to read class !ractions as already co posingthe sel#es$ as i! their unity were so ehow gi#en “in)itsel!” Fas the unity o! the cra!t$ ass or “social” wor'erG+ Today$ no such unity exists3 nor can it be expected to co e into existence with!urther changes in the technical co position o! production+ In that sense$ there is no prede!inedre#olutionary subject+ There is no “!or)itsel!” class)consciousness$ as the consciousness o! ageneral interest$ shared a ong all wor'ers+ @r rather$ such consciousness can only be theconsciousness o! capital$ o! what uni!ies wor'ers precisely by separating the + &

& See ‘The Holding Pattern’, Endnotes 3 , September 2013.


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This co position proble arises in a situation that we described in Endnotes 2 as do inated by thesi ultaneous existence o! surplus capital and surplus proletarians+ ,e !ocused there on the appearanceand expansion o! surplus populations$ as the hu an e bodi ent o! capital?s contradictions+ In Endnotes4 we ha#e responded to ista'en i aginings o! the surplus population as a new 'ind o! uni!ied or uni!iable subject+ It has been argued that surplus populations a'e little direct contribution toaccu ulation3 they lac' the le#erage o! traditional producti#e wor'ers$ who can bring the syste to halt

by withdrawing their labour+ oreo#er$ surplus populations can be arginalised$ i prisoned$ andghettoised+ They can be bought o!! with patronage3 their riots can be allowed to burn the sel#es out+How could surplus populations e#er play a 'ey role in the class struggle=

4urplus population as such does not to gi#e us an answer$ but helps us to identi!y the *uestion+ To theextent that there is an answer to be !ound$ we wager that the real location o! the posing(and thus the

potential answering(o! this *uestion will lie in the speci!ic sorts o! struggles proletarians engage intoday$ and thus it is in large part on these that we should !ocus our analyses+ In the o#e ents o! 2011%

1&$ it o!ten see ed that the endless negotiation o! the co position proble produced the thinnest o! unities+ The enca p ents o! the o#e ent o! s*uares were in large part gi#en o#er to the in!inite tas' o! disco#ering a co on basis !or action+ Ae!tists o!ten criticised this as i! it was erely reducible to a sorto! ideological con!usion or ista'e+ ut the absence or wea'ness o! de ands was a ore or lessuna#oidable starting point !or these struggles$ gi#en by their co positional !ragility+ Inso!ar as a unitycould be disco#ered$ it was i plicitly a populist one$ de!ined by its opposition to the state as an irrationalor corrupt i ple enter o! austerity+


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ut the !or o! appearance o! the crisis was not its essence+ In reality$ go#ern ents were not actingirrationally in the a!ter ath o! the crisis+ >s we argued in “The Holding Pattern”$ states were actuallyacting !ro a position o! wea'ness6 long)standing echanis s o! crisis anage ent are co ing upagainst their li its$ due to a co bination o! decades o! slowing growth and rising le#els o! indebtedness+In a world o! #ery high le#els o! total debt$ including debts o! go#ern ents$ businesses and households$

preser#ing the basic pro ise o! the !inancial syste (that these debts will be repaid(has been and hasto be the ain goal o! states$ i! they want to 'eep the econo y turning o#er Fwhich o! course they doG+ Inthe !inancial press$ all this is only now being disco#ered+ 4cholars close to 'ey policy circles are nowdisco#ering what was right under their noses$ the whole ti e6 the econo y is undergoing what they call“secular stagnation”+ Put plainly$ the econo y has been growing e#er ore slowly+ :nder conditions o! slow growth$ states will !ind that they ha#e #ery little roo !or aneu#er in dealing with catastrophice#ents to co e$ whether they be !uture econo ic crises$ or the already e erging conse*uences o! globalcli ate change+ 4low)growth capitalis will also produce e#er greater le#els o! ine*uality$ as Tho asPi'etty has now !a ously argued Fin a recycling o! old arxist #eritiesG+ Thus$ it will be e#er ore the

case that the rich stay rich and the poor stay poor$ while a rising share o! all inco e will !low towardsthose with inherited wealth+ ,e are slowly but surely returning to a world in which the personal power o! inherited wealth replaces a world in which oney circulates as an i personal aster+ These pessi isticconclusions are now beco ing *uite co on$ in a way that wasn?t yet true when we wrote the “HoldingPattern”$ ar'ing an i portant transition in public discourse+ > growing$ although still s all portion o! the population$ in the rich countries$ understands that the state$ e#en a real de ocratic state$ can?t sa#e us

(the reco#ery will not co e$ in any case(and thus we need to !ind another way to a'e li!e li#eable3we need to !ind a new way !orward+

Det$ in a #ery real sense$ we re ain stuc' in the sa e situation$ econo ically and socially$ that were in in

2011 Fe#en i!$ in a so eti es subterranean way$ #ery uch is changing and de#elopingG+ >lthough it hasnot generated a reco#ery$ the ode o! crisis anage ent has at least staunched the bleeding+ Thestruggles o! 2011%12 too' place on a assi#e scale$ yet due to the decisi#e actions o! the state$ whichli ited the crisis$ those struggles were the sel#es li ited+ 4till$ as in 2012$ it re ains the case that the

present holding pattern is unli'ely to last+ /irst o! all$ there could #ery well be another blowout$ co ing!ro the rich countries+ The ain thing here$ which we should de!initely tal' about$ is the ongoing$ andnow de!initely worsening crisis in reece$ with its potential to spill o#er to highly indebted and slowgrowing /rance and Italy$ e!!ecti#ely 'noc'ing out the Buro"one+


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The second possible source o! a blowout has to do with the !allout !ro progra es o! so)called“*uantitati#e easing”+ entral an's in the :4 and :;$ and now in Burope and Capan$ ha#e been ta'ingaction precisely where states ha#e !ailed to do so+ In the absence o! !urther go#ern ent spending$ central

ban's are underta'ing a wea' but e*ui#alent !or o! inter#ention+ In essence$ those ban's are creatingoney$ using it to push in#estors out o! sa!e assets$ such as go#ern ent bonds$ and into ris'ier assets$

li'e the stoc' ar'et+ entral ban's are trying to partially re)in!late bubbles+ ut *uantitati#e easing hashad contradictory e!!ects+ @n the one hand$ it pushed tons o! oney towards low)inco e countries+ Thatwas one reason why those countries were able to respond to the crisis in a di!!erent way$ underta'ing notausterity$ but assi#e spending ca paigns+ >t the sa e ti e$ it dro#e up the prices o! !ood and !uelworldwide+ That trans itted the crisis directly into the li#es o! the world?s poorest people$ who werealready struggling to a'e ends eet$ detonating the !ood protests that preceded the >rab 4pring+ It is

possible that when *uantitati#e easing co es to an end$ as it is now threatening to do$ this will wrea' !urther ha#oc on poor countries? econo ies$ which are already showing signs o! substantial wea'ening+

Here is a third plausible source o! the end o! the holding pattern6 that the crisis o! the rich countries will be extended to the poorer countries+ That the crisis would ta'e so long to extend !ro rich to poor countries !its with historical precedents+ Eecall that the Third ,orld debt crisis o! 15.2 ca e 5 yearsa!ter the crisis started in the rich countries$ in 157&+ ,e are now seeing assi#e slowdowns in hina$Eussia$ ra"il and 4outh >!rica$ although India has continued to grow+ The real danger$ here$ is that the

bubbles blown up by the hinese go#ern ent could pop+ ,ill state action in hina be able to 'eep thenow)starting de!lation o! asset bubbles !ro beco ing a assi#e crisis= ,hat will be the 'noc')one!!ects !or people li#ing in other low)inco e countries$ which until now ha#e relied on assi#e de and!ro hina to 'eep their econo ies growing= ,hat will be the e!!ects on the world econo y= The pointis that the pressures we outlined in the Holding Pattern continue to apply$ although the public

understanding o! this situation has e#ol#ed+ ,e re ain caught in the idst o! a slow) otion train wrec'+People continue to !antasi"e about what would be done to stop this wrec' !ro happening$ i! so ehow$all the li its pre#enting coordinated action were suddenly re o#ed+ ut while arxist econo ists dreaup ways to “to sa#e Buropean capitalis !ro itsel!”$ the wrec' continues on its course+ The worldecono y is a huge$ organic interrelation o! billions o! people+ This process will ta'e ti e+

Struggle update


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,e wrote the Holding Pattern at what in retrospect appears to ha#e been the end o! a high point in theo#e ent o! s*uares$ a last gasp$ just be!ore things started to !all apart+ >t the ti e we wrote it Tahrir

and 4yntag a s*uares$ Puerta del 4ol$ @scar rant Pla"a and uccotti Par' had all been #iolentlye#icted$ with little sign that they would be reclai ed !ro the police+ It was not external repression butinternal wea'nesses that we identi!ied as the reason !or the de!eat o! these o#e ents6 their inability toestablish a real unity beyond the day to day running o! the enca p ents+ Howe#er$ the occupation o!

e"i Par' in Istanbul$ which had just begun when we were writing the Holding Pattern$ see ed toindicate that perhaps at a global le#el the o entu had not run out+ ,e thus concluded by as'ingoursel#es whether the o#e ents would continue on the basis o! their existing wea' unity$ and thuscontinue to be de!eated$ or whether they ight !ind new !ighting !or s+ Det as Endnotes 3 went to presse#en this a bi#alent conclusion began to appear o#er)opti istic+ /or 4isi?s coup in Bgypt(shrouded inthe antle o! Tahrir(!or the !irst ti e introduced ass)shooting to the repertoire o! these o#e ents+The !ollowing year saw another bloodied s*uare in the aidan$ this ti e de!ended by !ascists+ 4hortlytherea!ter “@ccupy an'o'”$ organi"ed by royalist yellow shirts$ succeeded in initiating a ilitary coup

in Thailand+ any concluded that we had entered a period o! reaction$ where the ideas and !or s o! theo#e ent were appropriated by altogether dar'er !orces+

This conclusion$ howe#er$ turned out to be pre ature+ /or in !act se#eral o! the o#e ents we wroteabout in the Holding Pattern sur#i#ed$ and e#en those that didn?t continued to inspire si ilar o#e entsin the years that !ollowed+ This is not surprising$ since the principle target o! these o#e ents(austerity

(only intensi!ied$ along with its percei#ed hand aiden$ corruption+ In 4pain the 1ndwhen o#e ent acti#ists actually did succeed in getting elected they could no longer si ply bla eausterity on corruption$ !or they !ound that there really was no oney in unicipal$ county and state

budgets+ B#en when 4yri"a was #oted into the highest le#el o! go#ern ent they could only counter theausterity) ongering creditors with the suggestion o! a slightly lower budget surplus+


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@ther new o#e ents borrowed !or s and tactics !ro the 2011%12 wa#e$ whilst a#oiding the parlia entary route+ The assi#e student o#e ent that exploded in hile in 201& set up publicasse blies odeled on 1rab 4pring and 1utu n 2018 a student stri'e in Hong ;ong co bined with a pro)de ocracy group$ “@ccupy entral with Ao#e and Peace” to occupy the central business district$attracting 100$000 people at its pea'+ In these o#e ents anti)austerity and anti)corruption continued to

be do inant the es$ as did the exe plary *uality o! the occupations the sel#es$ which anaged to preser#e their innocence by 'eeping a distance !ro electoral politics+ This re ained true in the :4 with@ccupy?s brie! re#i#al in Kew Dor' during Hurricane 4andy6 the state organi"ations that had pro#edthe sel#es inade*uate in ;atrina would be directly replaced by direct action organi"ed #ia decentrali"ednetwor's+

In the Holding Pattern we !ocused on an internal li it o! these struggles6 the !act that the occupiers wereable to achie#e only a wea' unity on the basis o! practical exigencies and their co on aspiration tounity+ In reality they !ound that they were deeply di#ided$ both in ter s o! their objecti#e situations andtheir political and religious ideas$ and these di#isions would so eti es play out in #iolent con!lict withinthe s*uares+ In the struggle that !ollowed$ such di#isions were at ti es intensi!ied+ Thus in the aidan!ascists i posed rules !or participation on le!tists$ anarchists and liberals but it was 'nown that the !ragilealliance would only last as long as their co on ene y Danu'o#ych re ained in power+ In the iddleeast$ with the notable exception o! Tur'ey$ ethnic and religious di!!erences which initially appeared to besubli ated in the s*uares were o!ten a pli!ied as the occupations continued$ and bro'e out in open

con!lict whene#er Fas in Tunisia and BgyptG they pro#ed te porarily success!ul in o#erthrowing theexisting go#ern ent+

ut the outco e o! these o#e ents points to another li it that we o#erloo'ed in the Holding Pattern6geopolitics+ Larious powers succeeded in ta'ing the gains o! destabilised situations+ In the aidan$tensions between nationalists and pro)B: liberals had been brewing !or onths$ but they did not get

uch o! a chance to play the sel#es out$ !or as soon as Danu'o#ych resigned$ Eussia(!aced with the prospect o! B: and K>T@ extension to another country in its “near abroad”(in#aded the ri ea and began a proxy war in Bastern :'raine+ >t that point the rebellion beca e a ci#il war+ In Bgypt thecon!licts between radicals and the rotherhood$ or usli s and opts$ which had de#eloped in thea!ter ath o! ubara'?s !all$ were ulti ately sub erged in a larger regional power ga e$ as 4audi!inancial support allowed Bgypt?s deep state to reestablish itsel!+ Blsewhere$ !ro 4yria to ahrain$De en and Aibya$ the hopes o! the 4pring were snu!!ed out in ci#il war$ ilitary inter#ention or both+


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>nother$ less cold)war geopolitical li it was o! course encountered by those parlia entaristde#iationists6 4yri"a+ There too it was ulti ately the regional hege on that would decide the !ate o! the

o#e ents$ whate#er ca e out o! the asse blies and re!erendu s+ To understand the tepid nature o! 4yri"a?s proposals Fa &M rather than a 8M budget surplusG$ one ust see that it is ore than just a atter o! structural econo ic i balances in the Buro"one6 the !act is that the interests o! er an taxpayersreally do con!lict with those o! ree' go#ern ent e ployees+ The point is that !or any states in anincreasingly interdependent global econo y there is no option but to court the obile wealth o! creditors+

asic social ser#ices that would traditionally ha#e been !unded by taxing the wealthy are nowincreasingly !unded$ at least in the short ti e$ by borrowing !ro the (and paying interest !or the!a#ourN The increased de ands on the state !ro laid o!! wor'ers in a crisis thus coincide with increased

pressure !ro creditors$ whether do estic or international+ There is nothing 4yri"a can do about this$ !or reece cannot !eed itsel! without !oreign exchange$ and as the su er e#ents showed$ any sign o!

unilateral de!ault will deplete the country o! taxable re#enue+ Perhaps the only option$ as the Buropeano ission hie! announced in relation to the “no” #ote$ was to “choose suicide o#er death”+

Eecently an analogue o! the 4yri"a de#elop ents has occurred in the :; with the shoc' rise o! ae ber o! the Aabour Party?s long arginalised le!t)wing to its leadership+ The political discourses that

ha#e greeted these de#elop ents ha#e busied the sel#es with e pty rhetorical distributions o! the oldand the new$ but what is certain is that the social co position that propelled Cere y orbyn to #ictory isnot that which bac'ed Tony enn in the early eighties+ The institutional bra'ers ha#e o! course 'ic'ed into halt this upsurge$ and are li'ely to be success!ul+ ut can a party that has already been loo'ingcada#erous !or years a#oid sustaining an e#en greater loss o! legiti acy in the process= The 'ey *uestion!or the current strain o! political anti)politics re ains6 how any instances o! these #essels crashing onthe roc's will it ta'e to produce so ething *ualitati#ely di!!erent$ and what will that be=

The point o! this analysis is not that we erely ha#e to wait it out until the current holding pattern co esto an end+ The point is to identi!y in a strategically use!ul way what the dyna ics and li its o! thesituation are$ so that we are able to act with clarity+ The identi!ication o! li its is not a erely negati#e

atter o! locating constraints to action$ pessi istically diagnosing why we cannot go !urther+ It is aatter o! identi!ying the deter inate conditions o! the present$ and these are the positi#e basis !or what

action does occur+ ,ithin the current context we ha#e seen dyna ic odes o! struggle de#eloping$ suchas those around lac' Ai#es atter in the :nited 4tates+ These built upon both the hu an connectionsand the discursi#e possibilities that ha#e been opened up in recent wa#es o! struggles3 they explodedcertain wea'nesses o! @ccupy$ while rein#enting the in other ways+ Though in #arious ways their content re ained within a radical de ocratic !ra ewor'$ they o#ed beyond the occupation to de#elop

ore con!rontational tactics+ ,hile there are any dangers on the hori"on$ it is clear that the o entre ains pregnant with possibility+

Holding Pattern Update Talk for Greece

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