So, I had to skip Friday's post to get my drumming body in working condition, which I mostly achieved. Call it a musical interlude. In the meantime, of course, a lot has happened in the world of human affairs all leading into the deep, dark primeval forest of "who knows?". The main driver of events is finance as the global economy struggles to pay for itself, with conflicts arising over who gets paid and who does the paying. Being a typical American, the word which signifies the social organization called "Greece" immediately pops into my skull. Actually, I can only guess at what is popping into the skull of a typical American, but what is happening in Greece, I'd argue, is even more important than determining what was the best advertisement aired during the Super Bowl.
It's been about a week since the election of Syriza and now the scrambling, bluffing, game theory strategies, and finding politically acceptable ways to call a debt default something else (or not) is the main subject occupying the skulls of European leaders. The stakes are high, to use a little Vegas parlance, but this cute way of putting it hardly encompasses the inherent risk of miscalculation by all parties involved. The declaration by the German government that the Euro as a currency and the Eurozone as an ongoing concern could survive a Greek default and exit from the currency is about to be tested. Whether the EU or the currency can survive or not looks like an open question and I expect Germany won't allow the thesis to be tested given all the uncertainty in the financial and political spheres.
And these two spheres are not easily teased apart. They are dimensions of human activity tightly bound together and success in one dimension is heavily dependent on the other. This is what makes ideology such an interesting subject able to both clarify and confuse. In the last post I talked about the radical ideologies of the Greek election in light of the primary ideological forces which constituted main features of the 20th century. Alas, we are not so different today and, in the broader field of basic human activity, the 21st century isn't different at all from the past. If this sounds defeatist or gloomy, well, it's simply a perspective, and the reason to take a perspective is to reveal something truth-like about the situation. Likewise, if it's true that history is a nightmare from which we are trying to awaken, then it's a good idea to have a notion about what it means to be awake.
What's happening in Greece represents a failure of and a challenge to the System. The EU is a subsystem of the wider global System which has an ideology backing it called Neoliberalism. A better name might be Paleoliberalism because it is a sort of revival of earlier, say, 19th century, liberalism based on the political economic thinking of people such as Milton Friedman and Friedrich Hayek. Neoliberalism has been the dominant ideology across the globe since Thatcher and Reagan made it so. The political aspect of Neoliberalism is well known: Small government, free trade, maximizing private sector participation in the economy as opposed to government planning, etc. For reasons I've already discussed, this system is coming to an end, collapsing due to the impossibility of satisfying its insatiable hunger for debt. It could be said that Europe is socialist, and that is true to a point, but at the heart of it is capitalist production and that is what pays for all of it. European banking is fully a part of global finance and operates according to the dictates of the system, which is defined by the Neoliberal ideology.
In the wake of Neoliberalism's failure comes the old timey radicalism of Marxism and Nationalism. Both of these ideologies have revolutionary implications and each seeks to impose some other regime. An interesting note on the Greek election is that, in order to gain a parliamentary majority, Syriza had to form a government with the right wing Independent Greeks party, which is nationalist. Greek nationalists don't have all their ducks in a row the way the left seems to and so couldn't form a single party alliance in the way Syriza did, but the revelation here is that, even though these two parties don't agree on anything else, they can unify in order to end the Neoliberal-informed policy of economic austerity that has been imposed on Greece by the EU. This is an important consideration, especially for the elite who, it appears, are starting to sweat, because it means that a full-on challenge to the power of global finance can come from both left and right in concert regardless of what other differences they might have. So how the Syriza government performs and how the Greek electorate perceives events will be watched closely.
How events unfold will revolve around the risks around whether Greece stays in the Eurozone or is ejected from it. If Greece were an isolated incident or that there were somehow no other broader context to consider, then it would be a relatively simple matter. As it is, though, the Greek situation is not just for Greeks. What is happening is a culmination of powerful historical currents that are pointing to a fundamental reordering of human life. In the economic realm you have a global deflationary pressure that is undermining attempts by governments and their policy makers to restart economic growth, making an all out debt deflationary spiral likelier with each passing day. This is especially true in the EU, but China and Japan are at significant risk as well. In geopolitics, Russia is waiting in the wings having extended it's good will and offering an alternative trading block to the Greeks should Greece leave the EU. Unifying the theme is generalized discontent over the economic inequality as the logical end to Neoliberal ideology that the world over is blaming on the system that Neoliberalism has produced. If, or when, that system fails to produce, then people in all parts of the Eurozone, and then the world, will be looking for alternatives. This is what Greece represents.
So what began with the credit blowout and market crash in 2008 in New York City and shook the global financial system is now coming back to the center (New York) from the periphery (Greece) in a deflationary high tide that is flowing through Berlin. The human adaptive strategies of cooperation and conflict will be employed. What happens in the EU and with Greece will, to put it mildly, set the tone for what happens after that in terms of the overall contractionary environment. The German electorate will have a large role to play in this. How broadly Germany defines its own national interests will have a big impact on the future. I frame it this way: If Germany decides to give up some of its wealth through debt forgiveness to Greece for the sake of its broader political self-interest, then it is a zero sum game. If Germany does not do this and lets Greece leave the Eurozone, then the result is most likely a negative sum game. In other words, everybody looses, and the world officially enters a new phase.
In periods of crisis the trust horizon diminishes. Cooperation takes a back seat to conflict when people don't know who they can trust. There are good reasons for foreign governments not to trust Greece. But the issue is much larger. How nations behave towards each other as the global economic pie shrinks will flavor how well or poorly humanity scales down the wealth mountain that can no longer be financially justified in the face of resource constraints. The EU, as the pinnacle of international cooperation in the good times, will be a lab test for how the ideals of a global society could possibly be maintained. And that will depend on what goes on within their skulls. Maybe some exciting, new, and realistic ideology could replace the three main contenders based on the Ecologist Party, the lone Green Party in the Syriza coalition. With that I'll raise a glass to hope.
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