The European Crisis: Who Wins?

[Omi]

Original piece by Michael Hudson:



Who Wins?

October 3, 2010
By Michael Hudson (http://michael-hudson.com/author/Michael%20Hudsom/)
While Labor Unions celebrate Anti-Austerity Day in Europe, European Neoliberals raise the ante:
Governments must Lower Wages or Suffer Financial Blackmail
Most of the press has described Europe’s labor demonstrations and strikes on Wednesday in terms of the familiar exercise by transport employees irritating travelers with work slowdowns, and large throngs letting off steam by setting fires. But the story goes much deeper than merely a reaction against unemployment and economic recession. At issue are proposals to drastically change the laws and structure of how European society will function for the next generation. If the anti-labor forces succeed, they will break up Europe, destroy the internal market, and render that continent a backwater. This is how serious the financial coup d’etat has become. And it is going to get much worse – quickly. As John Monks, head of the European Trade Union Confederation, put it: “This is the start of the fight, not the end.”


Further reading: http://michael-hudson.com/2010/10/who-wins/


Any thoughts?

[Die Neue Zeit]

He has a distorted view of the European Central Bank and of the Federal Reserve, ignoring the fact that the latter is privately owned.

[RadioRaheem84]

Is our Federal Reserve really privately owned? I figured it was just a really independent government agency. So independent that it might as well be private.

[zimmerwald1915]

Is our Federal Reserve really privately owned? I figured it was just a really independent government agency. So independent that it might as well be private.
The Fed exists in a nebulous legal space. The 12 Federal Reserve Banks each give a set number of shares to the member banks in their regions. These, however, are not bought and sold on the market, but simply entitle the member banks to elect two-thirds of the boards of the Federal Reserve Banks. The other third of each bank's board is appointed by the Board of Governors, the government body in charge of setting Fed policy.

Basically, the Fed is a privately owned body that is managed in concert both by its private owners and by the government. It also has independent powers to essentially create its own budget by virtue of its control over the money supply, and does not depend either on Congress or on its member banks for its funds.

[El Rojo]

the crisis isnt over yet, so who knows

[Ligeia]

Legislations have been passed and there are still more to come in the next months despite strikes or simple rejection in European countries who are being forced to such measures.
I wouldn't even be sure that austerity measures will be implemented slower with changing legislation periods in the respective countries.
It's either going further down the road or...something else which I don't know what it could be. I wouldn't make any predictions now.

[Luisrah]

the crisis isnt over yet, so who knows

The fucking crisis is never over

[RebelDog]

The fucking crisis is never over

Totally true. Capitalism is a permanent crisis for most of humanity.

[ckaihatsu]

Basically, the Fed is a privately owned body that is managed in concert both by its private owners and by the government. It also has independent powers to essentially create its own budget by virtue of its control over the money supply, and does not depend either on Congress or on its member banks for its funds.


Considering that the U.S. dollar serves as the world's reserve -- (default) -- currency, or index, and the Fed controls the relative supply -- (nominal value) -- of that currency, it's no wonder that the Fed is looked to as being a religious-like authority, especially during good times -- it's like the mouth-opening, or throttle, for all of human civilization in our age, controlling the general "RPMs" of how fast the world turns....


---


("RPMs" -- "revolutions per minute", or base engine speed, that is the raw power that can be converted at various ratios and torques, into the actual speed on the ground)

[razboz]

Okay, so the thing i liked about the article:
It promotes a total analysis of European Neoliberalism within Hudson's worldview. So i guess now we know a little bit about how this one guy sees the European Economic system. Considering i knew little about Hudson before today, this has been useful to me.

Now things i liked less.

His gratuitous capitalisation of Neoliberal Revolution.

His unquestioning approach to the mainstream 'leftist' Latvian Unions. He really at no points seeks to discover anything about them, other than their public face: how do they organise? Who is paying for the Latvian opposition to austerity? Why are they not questioning all Capitalism?

My biggest problem with this is that it fits nicely into some seriously pre-established narratives: Neoliberals be killin' Labour. We've been getting this kind of story-telling here in Scotland for a while now. The Unions organise against the new waves of Maggie Thatcher-style cutbacks (anything up to 1 million unemployed, i hear) while the government gears up to push them through. Eventually either the State will cripple Labour enough to gain some new powers over citizens, or transfer more power to corporations. In this panorama, 'Labour' must only integrate more with the State, become more of a branch of government and less a branch of the 'working' class or face losing the Class 'War' where it counts for the leadership. And what counts for them is getting new legislation which protects their power.

Hudson seems to argue the reformist line that the market has been perveted beyond what would be naturally good for society. One of his proposals seems to be to counter the neoliberal revolution with a growth in Union power, and more Union political engagement. A corollary of this seems to be that he also wants to see more State power backing the Unions against the market-perverting influences of monopoly and the European banking system. He even throws in a little bit about subsidies, confirming that they would distort the market. The Market as some incorruptible ideal entity producing more wealth for all, is a fundemental part of all economic analyses, be they Keynsian, Neoliberal or Marxist. It's kind of hilarious that he threw some Plato in there, as one of Plato's most reviled styles of argument involved the nebulous world of Ideals. It makes calling his worldview neoplaonic almost sensible.

It seems almost as a matter of course that Hudson's argument fits into a broader discourse propagated by reformist elements of the Trade Union movement in Europe. This is an argument that deflects all of the attention from the root causes of crisis, and focusses on the broad categories of 'European Legislators','Bankers' and 'Neoliberals'. This means that his solutions are also predicated on broad conceptual groups, which probably only exist in academic analyses. As he begins to point out, almost everywhere 'Labour' is fragmented, fighting itself for control of its own patches. Intestine leadership battles and splits are much more the norm than any kind of ideological rejection of Neoliberalism. Not only that, but in almost all countries Labour justifies the State, even as they fight the State's police out in the street. They participate in making the bosses slightly less bad, every so often, while the bosses make things worse continuously and while the State, leftist, neoliberal whatever, uses this perpetual 'conflict' to continue its own existence as mediator (smacks of fascism, dunnit?) So when 'Labour' claims that austerity will harm them and alternatives must be fought for, what they mean is that austerity will harm 'Society', and that the State must seek new routes to favour wealth creation, preferably through an adapted version of the Market economy. And in all of this not many people seem to be wondering whether the market can ever exist in a way that reflects this ideal market. Or whether that would even be a good thing.

What i see in this article is the same flaw i find in many lefty examinations of crisis. There is simply no discussion of power structures that cause and encourage crisis and exploitation, or of those power structures like unions which while they appear to be opposed to the status quo, can never truly combat it as their structures and analytical tools are evolved to sustain those in power.