Gurdgiev And Lucey Misrepresent The Greek Crisis

international | anti-capitalism | opinion/analysis Thursday July 07, 2011 21:52 by Paddy Hackett rasherrs at eircom dot net

Greece And The Euro Crisis

Throwing more debt, in the short or long run, at the problem will not solve the problem. This is precisely because the source of the problem does not lie within the process of circulation (i.e. money and credit spheres). It is lodged within the production process.

Much of the radical Left/Right falsely posit the current capitalist contradictions as existing within the process of circulation of capital. This is why they persistently confine themselves to solutions that are grounded in circulation. They focus on money, credit, spend, taxation and commodities. Each one of these forgoing factors are necessarily confined to the sphere of circulation. Consequently they cannot provide the key to the solution of the Euro crisis let alone the current world capitalist crises. The Left/Right are the present day King Canutes of this world.The crisis of capitalism is the crisis of the Left.

The Euro crisis, today, has found its extreme expression in Greece --economically and politically. The Greek social system is enormously indebted so much so that it cannot sell government bonds in order to acquire credit with which to meet the cost of running the state. Consequently the Greek ruling class is being forced to seek loans from the EU under very strict conditions that will, in the short term at least, will further hinder growth. These austere conditions involve enormous privatisation of state companies and large cut-backs in state spending. Much of this austerity package will entail job losses, diminished incomes and reduced state welfare benefits. Even this forthcoming Euro loan will not go near getting Greece out of its financial and economic problems. At most it may merely temporarily alleviate the financial problem. This punctuated policy amounts to death by a thousand cuts.

Some commentators mistakenly argue, Constantin Gurdgiev and Brian Lucey, that the better approach is a comprehensive deal to sort out Greece's problems now.This,they claim, must involve debt forgiveness and presumably economic restructuring. They argue that a piecemeal approach can only but prolong the crisis leading to an even more devastating situation. This, they claim, can only intensify the problem thereby rendering the collapse of the Euro more likely followed by universal fallout.

The EU tops and their subalterns argue that the punctuated policy of death by a thousand cuts is the best policy in the circumstances. By staging financial help to Greece accompanied by the imposition of belt tightening it appears that the EU hopes to protect the Euro.The overall fear among the European bourgeoisie is the collapse of the Euro and the ensuing fallout.

Neither policy can solve the . The Euro crisis is the result of a much deeper dynamic.

The problem has its source in the failure of capitalism to produce sufficient value to compensate for the falling general rate of profit --the regulator of the capitalist economic system. Resisting this ongoing falling volume of surplus value will not be sorted out by throwing more debt (paper) at the problem. At most this just postpones the crisis leading consequently to an even more devastating crash.

The solution has to be the production of more surplus value. This economic problem is lodged within the production process --not in the circulation process. This means that transformation must take place within the process of production.

Consequently this leaves only two options open:

The capitalist solution. A massive development of technology on an unprecedented scale leading to an enormous increase in the rate of surplus value and thereby the volume of surplus value produced.

The communist solution. A revolutionary transformation of the production process involving the abolition of capital and thereby the valorisation process.

Throwing more debt, in the short or long run, at the problem will not solve the problem. This is precisely because the source of the problem does not lie within the process of circulation (i.e. money and credit spheres). It is lodged within the production process.