8. Greece Lightning

Chapter Eight of How to Dismantle an Empire

I’ve been observing that the places hit with weather weapons are often rebellious ‘colonies’ particularly from the POV of the banking empire. Lack of rainfall in Iran has created the most severe drought in 50 years “due to climate change and government mismanagement.” Iran is part of the ‘axis of evil’ that’s held out from being part of the Bank of International Settlements, the BIS that’s the central bank of central banks.

Another two countries hit hard are Greece and Libya. I have chapters on each in my book, How to Dismantle an Empire. Greece has been hit by both fires and floods, as Vanessa Beeley chronicles:

Thessalia tragedy. Greece in NATO and Zionist crosshairs

To make the connection between the failed coup against the bankers a decade ago and the weather weaponization today, I’m going to read my chapter on Greece here and the chapter on Libya in the next episode. Coincidentally the platform developed by Yanis Varoufakis for the rebel Syriza party was called the Thessaloniki program and Thessalia is where the flooding hit.

And because fiction can’t exaggerate reality, Syriza—now the main opposition party in Greece—just elected their new leader: an ex-Goldman Sachs trader and banker. I’d noticed that he was surrounded by hunky men and looks like Rock Hudson before reading he’s gay. Of course. “I will never betray you,” he gushed in his acceptance speech. So let’s go back before the first betrayal, when there was something to betray.

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Chapter EIGHT: Greece Lightning

Getting a living under capitalism... is so precarious, so uncertain, fraught with such pain and struggle that the wonder is not that so many people become vicious and criminal, but that so many remain in docile submission to such a tyrannous and debasing condition.

—EUGENE V. DEBS

The problem with capitalism is not that it is unfair but that it is irrational, as it habitually condemns whole generations to deprivation and unemployment and even turns capitalists into angst-ridden automata, living in permanent fear that unless they commodify their fellow humans fully so as to serve capital accumulation more efficiently, they will cease to be capitalists.
So, if capitalism appears unjust this is because it enslaves everyone; it wastes human and natural resources; the same production line that pumps out remarkable gizmos and untold wealth, also produces deep unhappiness and crises.

—YANIS VAROUFAKIS

We started our excavation by looking at how democracy came to be reconciled with slavery and imperialism in ancient Greece at the same time that coinage created impersonal forms of exchange. When we examined the reality behind the concept of money, we found that it wasn’t a unit of trade, as is generally assumed, but rather a means of extraction. Land monopoly created a master-slave pyramid in which money was backed by the labor and resources of those at the very bottom, who produced the food and goods that the rest consumed. At the top of the inheritance order, or heir-archy, were the archons who issued the coins needed to pay debts and taxes, ensuring that everyone who worked for money ultimately served their interests.

Twenty-six centuries later, that contradiction is rearing its ugly head in the place of its birth. Greece is pinned to the mat in a struggle between capitalism and democracy, with capitalism on top. The modern Areopagus, known as the “troika,” is the International Monetary Fund, the European Central Bank and the European Commission. In exchange for a €240 billion bailout, which benefited the banks, they have imposed harsh austerity measures. But Greece is fighting back. Time will tell if they will complete the revolution they started and end their dependency on slavery or fight for a higher place on the master-slave pyramid.

flashforward

Leave it to the Greeks to look at crisis philosophically. In the collective work, Revolt and Crisis in Greece: Between a Present Yet to Pass and a Future Still to Come, Christos Lynteris writes,

Crisis, as it appeared for the first time during the classical age,

comprises the opportunity [kairos] par excellence of truth, the time when all phenomena and illusions give way before a momentary and fully recognizable explosion of the true substance of the human condition ... [Quoting Foucault] “truth is not lying there waiting to be grasped by us; it passes, and it passes rapidly, like lightning; it is in any case linked to the opportunity, to the kairos, and must be seized.”

According to Lynteris, the lightning flash created by crisis makes the underlying reality visible to everyone, not just those who have been discerning its shape in the darkness. The rules of the society are held in temporary suspension and anything becomes possible. Foucault further compares crisis to the moment when a disease manifests in the body, showing the doctor that the immune system has lost the battle and he or she must intervene. Lynteris elaborates,

This [intervention] however must not happen before the crisis, for then the disease will not express itself and will endure ... possibly leading to even worse results in the future or even to a chronic state. The classical doctor as much as the modern economist must thus predict the crisis and arrange things in such a way that [the intervention] will appear at the right moment, at the right opportunity.

the spark of a murdered schoolboy

On January 1, 2001, Greece joined the monetary union of the Eurozone, abandoning their drachma of ancient origin. For two years they had been stalled for failing to meet the EU’s criteria of deep budget cuts to public spending and a tough austerity program. Yet two-thirds of the population supported membership and believed it would add stability and new opportunities.

Yet over the next few years, workers lost income while the price of goods rose. Interns, temps, and contract workers replaced experienced professionals, artificially lowering unemployment. In 2006, Greece had the second-lowest average wage in the EU15 and the highest percentage of working poor in the EU25. In addition, 70% of all new jobs were part-time.

Tensions had mounted with the 2008 Athens Olympics, which came with a high price, dangerous jobs, a debt of over 6% of GDP, and a police and surveillance system that stayed on long after the crowds went home. Greece’s per-capita military expenditures were already the highest of any NATO country, and its official military spending topped the charts at 3% of GDP—and may have matched their national deficit once the hidden costs were added. Its police force, at one per 300 people, was second only to Italy.

The most supercharged friction came from the 23% unemployment of the youth, which included migrants and nationals, drop-outs and degreed, laborers and professionals. University graduates with high debt manifested even higher unemployment than their compatriots sans degree, giving the lie to security through academia. These marginally-employed twenty-somethings formed a new class of “precariats.”

Finally, the spark that unleashed the lightning happened in the form of a random police killing of a 15-year-old schoolboy, Alexandros Grigoropoulos, in December of 2008. No one knows why this incident opened Pandora’s box. Perhaps the futility of following the rules was finally revealed. Maybe it was clarified that no one was safe. Possibly the two-thirds who’d supported joining the EU experienced a flash of their own futures. For whatever reason it ignited weeks of mass protests of a rage and fury that frightened the archons into compromise—just like twenty-six centuries prior.

greece on the skids

A year after the revolt, in December 2009, the imperial troika struck back. A group that goes by the Greek acronym TPTG (The Children of the Gallery) documented some of the austerity measures that were imposed for debt restructuring:

• Public sector salaries were reduced 7% with benefits cut 20%.

• Public transportation and energy were opened to privatization.

• In order to hire one public employee, five had to be retired

  while only those who had worked a full 40 years to age 65 were eligible for a (reduced) pension.

• Entrants and the long-term unemployed could be hired at less than the minimum wage.

• Temporary workers and part-time contracts were encouraged.

At the same time that public investments were cut by €2 billion, €10 billion was deposited in a “Financial Stability Fund” for the Greek banking system. The government prepared their police and military for the backlash. Formerly, anti-terrorism laws had allowed “nuisances and disruptions” as necessary to protect democracy. But no longer was the “exercise of fundamental individual, political and labour rights” excused as a valid cause to block traffic—protest became a potential act of terrorism.

Since 2008 Greece experienced a drop in GDP comparable to the first five years of the US Great Depression. By 2013 overall unemployment had reached 27%, suicide was prevalent, cars sat abandoned in the streets, and people rummaged through garbage looking for food. The troika had demanded over 800 new legal actions a year requiring hundreds of new laws that shifted from week to week. By the IMF’s own predictions, it would take twenty years for Greece just to recover the jobs it had lost.

a permanent state of workfare

Public universities were particularly targeted by budget cuts. The number was first reduced with mergers, closures, and layoffs. In the aftermath, when the survivors were too frightened to object, the remaining universities were given provisional funding on the basis of specific contracts. This included:

• Meeting quantifiable targets for research and absorption of graduates into the labor market.

• Abolishing student and professor representatives in the administration, to be replaced by a government-appointed Board of Trustees consisting of private-sector CEOs.

• First-year exams for students to filter out non-performers.

• Division of study into measurable units aligned with business needs.

The Children of the Gallery see Greece as a laboratory to test out a new shock-policy implementation of fiscal terrorism along with police repression in an ongoing counter-insurgency campaign. They see the goal as a permanent state of workfare, although whether this means warfare or welfare isn’t clear. Perhaps it’s warfare on the people and welfare for the bankers and corporations.

In addition, TPTG offer a Marxian analysis, starting with the Das Kapital quote that “The only part of the so-called national wealth that actually enters into the collective possession of a modern nation is the national debt.” Since the late 1960s, they claim, international capitalists have been in a legitimacy crisis where the indiscipline and insubordination of the proletariat has made it impossible to satisfactorily reproduce earlier class relations. In other words, the servants are getting uppity.

To back up their point, TPTG give detailed examples of how the attempts of capital are failing or even backfiring, leading to an “exploitability crisis” of labor and resources, and a protracted fiscal crisis of overaccumulation. This means that there’s no longer enough labor and resources to exploit in order for vast amounts of capital to be invested at a profit. Neither is there enough currency in circulation to drive consumer demand. Capitalism has functioned so well that it’s a victim of its own success.

the sacred nature of debt

TBTG reveals the background of how this has happened. In third-world countries, lack of investment in education has created a dearth of skilled workers while, at the same time, environmental and peasant struggles have made the expropriation of minerals more costly. Meanwhile, in consumer nations, low wages and unemployment have led to high costs for safety-net programs, cutting into profits. Capitalism has extracted too much money and left too little among the middle classes to redeem the debts, defeating the purpose of money in subordinating labor. Instead, mass flows of capital have gone directly into the financial sector and particularly into speculative betting on the future extraction of value. TBTG adds,

However, since debt and speculation cannot be used ad infinitum to boost capitalist development faster than it is warranted by the underlying flow of new value generated in production, the bubbles created by the excessive run-up of debt burst one after the other resulting in recurrent crises.

This puts the crisis on the other foot. In order for capitalism to work, there needs to be a consumer class willing to defend it with either weapons or words—through the military, the police, the schools, the media, and the professions. When there’s not enough currency in circulation to induce this collaboration, people start questioning what David Graeber terms “the sacred nature of debt.” They relinquish the dogma that debt, and particularly a country’s sovereign debt, is immutable.

They might even come to agree with John Maynard Keynes that “if you owe your bank a hundred pounds, you have a problem. But if you owe a million, it has.” Perhaps the people may decide not to solve the bank’s problem and focus instead on their dependency on the slave-made products that money buys. Maybe Graeber is right in seeing Greece as

...a dress rehearsal for the likely fate of the global imperial system when it finally reaches its limits and the era comes definitively tumbling to a close.

cyprus: death by moody’s

After Greece, austerity jumped to the neighboring nation of Cyprus, which had kept a large chunk of its bank holdings in Greek government bonds. When the Greek bonds were devalued, the island of Cyprus sunk fiscally underwater. To make matters worse, bank holdings equaled nine times the GDP because government officials had opened Cyprus as a tax haven, particularly for Russians absconding with their own country’s wealth. One Russian oligarch alone was a 10% shareholder in the Bank of Cyprus. The bank accounts of these money-launderers and tax-cheats were commingled with the bank accounts of ordinary Cypriots, who derived no benefit from the foreign money and bore the brunt of higher costs.

In the summer of 2012, Moody’s slashed Cyprus’ credit rating to junk status and Fitch downgraded their bonds so they would no longer be accepted as collateral on loans. This meant that Cyprus was unable to raise money in the ordinary way, by selling bonds and passing the sovereign debt on to taxpayers. Instead the Open Bank Resolution of the 2010 BIS Committee had this advice: when bank failures become too expensive for governments to bail out the lenders, the losses should be shifted to the banks’ shareholders and creditors, which—surprise, surprise—includes depositors.

Legally, it turns out, when money is deposited in a bank, they own it. In return the depositor is given a credit account, which is considered a liability or debt of the bank. If the bank goes belly-up, depositors are considered unfunded creditors and get in line after the financial firms and central banks that have bought the bank’s debt. Foreign Policy in Focus correspondent Bryan Cenko explains how this distinction enabled the shakedown in Cyprus:

Initially it appeared that a one-off 9.9-percent levy would be imposed on all deposits over 100,000, and a 6.75-percent levy on deposits below it. Instead, Laiki—the country’s second-largest bank—is to be split up with its healthy assets absorbed into the Bank of Cyprus. Depositors in Laiki could face losses anywhere between 60 and 77.5-percent of their uninsured savings.

savage austerity and sado-monetarism

All across Europe the speculative losses of banks were transformed into the sovereign debt of nations. The trick worked magic for German, Dutch, French, British and Austrian bankers at the expense of Greek, Irish, Spanish, Cypriot, and Portuguese workers, just to name some of the victims. In his Foreign Policy in Focus blog post, “Spanish Austerity Savage to the Point of Sadism,” Conn Hallinan explains that whether the policies of “sado-monetarism” are succeeding or not depends on where you sit:

If you work at a regular job, you are in deep trouble. Spanish unemployment is at 25 percent—much higher in the country’s southern regions—and 50 percent among young people. In one way or other, those figures—albeit not quite as high—are replicated across the Euro Zone, particularly in those countries that have sipped from Circe’s bailout cup: Ireland, Portugal, and Greece.

But if you are Josef Ackermann heading up the Deutsche Bank, you earned an 8 million Euro bonus in 2012, because you successfully manipulated the past four years of economic meltdown to make the bank bigger and more powerful than it was before the 2008 crash. In 2009, when people were losing their jobs, their homes, and their pensions, Deutsche Bank’s profits soared 67 percent, eventually raking in almost 8 billion Euros for 2011. The bank took a hit in 2012, but the Spanish bailout will help recoup Deutsche Bank’s losses from its gambling spree in Spanish real estate.

And, just in case you thought irony was dead, it was the Spanish housing bubble that tanked that country’s economy—at the time Madrid’s debt was among the lowest in the Euro Zone—and German banks (as well as Dutch, French, British and Austrian) financed that bubble. German Banks also financed the real estate bubble that crashed Ireland’s economy. Some 60 percent of Deutsche Bank’s income is foreign based.

Consider this figure: in 1997 real estate loans in Ireland were 5 billion Euros. By 2007 they were 96.2 billion Euros, a jump of 1730 percent. Real estate prices rose 500 percent, the same amount that Spanish housing prices increased. The banks didn’t know they were pumping up a bubble? Of course they knew, but they were making money hand over fist.

When the American financial industry self-destructed in 2008, the Irish and Spanish bubbles popped, and who got the bill? Irish taxpayers shelled out $30 billion to bail out the Anglo-Irish Bank—essentially the country’s total tax revenues for 2009—and in return got a 15 percent unemployment rate, huge cuts in the minimum wage, pension reductions, and social service cutbacks. Spain is headed in the same direction.

And it’s not just Europe. Hallinan points out that capital is on the march around the globe, using the rallying cry of “economic crisis” to roll back social programs, weaken unions and privatize everything they can get their hands on. He recommends P. Sainath’s Everybody Loves a Good Drought for an apropos analysis of how India’s landlords manipulated a natural disaster into agricultural control. Sainath presumably means the same ‘everybody’ who loves a good sovereign debt.

more carrots, fewer sticks

In Revolt and Crisis in Greece, Christos Lynteris laments that the Left is entrenched in Welfare State protectionist nostalgia while the Right is “splitting in ever more obscure parcels of populist obscurantism.” He concludes that it’s easy to criticize the opposition but more difficult to provide a meaningful and workable model as an alternative. John Maynard Keynes asserted this same warning nearly a century earlier, saying:

The decadent international but individualistic capitalism in the hands of which we found ourselves after the war is not a success. It is not intelligent. It is not beautiful. It is not just. It is not virtuous. And it doesn't deliver the goods. In short we dislike it, and we are beginning to despise it. But when we wonder what to put in its place, we are extremely perplexed.

However, under the direction of Finance Minister Yanis Varoufakis, the Greek Syriza Party made an attempt with their Thessaloniki program and its four pillars of national reconstruction.

In a 2015 article Conn Hallinan continues:

The January 25 victory of Greece’s left-wing Syriza Party was, on one hand, a beacon for indebted countries like Spain, Portugal, Italy, and Ireland.

On the other, it’s a gauntlet for Germany, the Netherlands, Finland, and the “troika”—the European Central Bank, the European Commission, and the International Monetary Fund—that designed and enforced the austerity policies that have inflicted a catastrophic economic and social crisis on tens of millions of Europeans.

The troika’s policies were billed as “bailouts” for countries mired in debt—often as a result of the 2008 financial speculation bubble, over which the indebted countries had little control—and as a way to restart economic growth. In return for the loans, the EU and the troika demanded massive cutbacks in social services, huge layoffs, privatization of public resources, and higher taxes.

However, the “bailouts” didn’t go toward stimulating economies, but rather toward repaying creditors—mostly large European banks. Out of the $226 billion loaned to Greece, 89 percent went to investors. After a full five years under the troika formula, Greece was the most indebted country in Europe. Gross national product dropped 26 percent, unemployment topped 27 percent (and over 50 percent for young people), and one-third of the population lost their health care coverage.

Varoufakis, who calls himself an erratic Marxist, points out that Marx identified the contradiction in capitalism: wealth accumulation is frozen and taken out of productive use, necessarily creating its binary opposite of poverty.

This might be better understood if wealth is seen as power over oneself and money is seen as power over others. Power over others can only exist by destroying the ability of people and communities to have power over themselves. Natural, physical, and human capital is monetized so that each can be sold off, exchanging the wealth of self-sufficiency for money’s temporary power over others.

A wall poster in Athens reads, “As carrots run out, sticks become plenty.” The carrot of easy money was chased when foreign credit initiated a housing windfall. The resulting slosh of Euros in the Greek economy allowed them to import more products without the inconvenience of trade. On the other hand, the need to serve the banking masters became the stick, with higher debts and housing costs, and less autonomy. The servants of capitalism can be distinguished from the slaves because they have both carrots and sticks; for the slaves there are just plentiful sticks.

empires on which the sun ever sets

Where are the empires of the last millennium now? Portugal, the longest-lasting empire, is experiencing a “brain drain” where one in ten graduates is leaving for its former colony, Brazil. This isn’t surprising since the jobless rate for Portuguese youth is 42% compared to an already alarming 19% in the overall population.

Spain, the first empire on which the sun never set, has seen sado-monetarism put half its youth and a quarter of its citizens out of work. The leader of the anti-austerity party Podemos once tweeted hopefully, in response to the Greek elections, “2015 will be the year of change in Spain and Europe.” It turned out neither changed for the better. Ireland is still losing tens of thousands of its youth—no longer "kid-nabbed" but now fleeing indentured servitude at home.

In Italy, home of the Roman Empire and the formerly pervasive Holy Roman Empire, tens of thousands marched against budget cuts, throwing eggs and firecrackers at the finance ministry. In the 2013 elections one in four voted for comedian Beppe Grillo rather than any politician.

Paris is pushing back on its debt and the French were simmering just under the austerity boiling point, and by 2019 have boiled over. London went from EU-skeptic to full-on Brexit, with the consequences still to be determined. And Greece, where it all began, still is trying to navigate between the rocks of democratic-capitalism and the rapids of a capitalist democracy.

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The following are part of each chapter in the book, designed for classrooms or groups. I sum up the paradigm shifts in that chapter, establish a lexicon for how I define words and phrases, and pose questions for reflection and discussion.

Paradigm Shift #8A

The economy rules the government, government doesn't rule the economy. Before the economy can be changed, control must be decentralized.

Bigger is better for empire but
smaller suits sovereignty.

Paradigm Shift #8B

Revolution is predictable but the timing and outcome are not. Although the timing can't be seen, preparations must be made or the outcome will be the same thing in a more resilient form. However, intervention pre-crisis will simply prolong the disease.

LEXICON

Explain how the following definitions change the dialogue around social problems. Is this concept used in discussion of the examples to which it applies? If not, how does this affect the potential solutions?

the troika: the International Monetary Fund (IMF), the European Central Bank (ECB), and the European Commission (EC). Together, they comprise the true government of Europe.

crisis: the time when illusions give way before truth and the underlying reality of a situation is visible to all, providing a fleeting opportunity for change.

Eurozone: a monetary union in which all sovereign currencies are given up, along with the prerogative of determining the trade value of other currencies in relationship to one's own.

fiscal terrorism: economic policies backed up by police repression that keep a population competing in order to survive, without the time or means to organize a revolt.

workfare: a system in which jobs are doled out as if they're charity, with wages too meager to make a living, providing corporations with cheap and ample labor and bankers with the debt-appropriation of assets.

exploitability or overaccumulation crisis: a massive amount of private wealth and few sufficiently profitable assets to invest in; the point at which so much capital has been monopolized that there is nowhere for the vast sums to go to usurp labor and resources.

speculative value: the hypothetical selling price of a tangible or intangible asset, such as real estate or stock options, based on the actual sale price of a small percentage of the asset, and assuming that the whole asset class could be sold for the same, despite the price being determined by scarcity of the asset and an abundance of bank credit relative to the asset.

speculative bubble: when a useful asset such as a house or education is priced according to the debt that financiers are willing to lend and buyers are willing to accept, based on their assumption that it can be sold for more later. This forces the practical users of the asset to be gamblers who have a vested interest in keeping the value inflated in order to recoup their "investment," having paid double the price with interest. It also attracts predatory multinational funds that are protected from loss by insider information or influence.

government bonds: when a local, state, or national body of representatives votes to spend tax money in advance of collecting it by issuing debt certificates to be repaid with interest. These allow the collection of interest through taxation while being tax-exempt for resident bearers. They also allow international financiers to make risk-free loans with taxpayer bonds as collateral.

national credit rating: an arbitrary assessment by Moody's or Fitch or another agency that a country will be unable to pay its debts to financiers, making the entirety of its debts due immediately and eliminating the ability to raise money from its own taxpayers through bonds.

bail-in: based on the Open Bank Resolution of the 2010 Bank of International Settlements, shifts the losses from bank failures onto the depositors as "shareholders" of the bank to protect the bankowners and hedge funds as investors.

QUESTIONS FOR REFLECTION AND DISCUSSION

Eugene Debs and Yanis Varoufakis came to similar conclusions a century and an ocean apart. Both identified as socialists, or "erratic Marxists", and both put their principles ahead of their safety and careers. What do you know about either and what, do you think, are the similarities and differences in the situations of their times and countries, and their positions?

In the US, what are the factors that you think might trigger the crisis that offers the possibility for change? Does the crisis need to hit everywhere at the same time? How would you diagnose the disease? What are interventions that might be possible in a crisis that wouldn't be considered now?

Analyze some of the austerity measures imposed on Greece and how they would affect people in the US if enacted here. Do you see forms of any of them in the US currently?

Does John Maynard Keynes's statement about "decadent ... individualistic capitalism" surprise you, his disgust with it or his ‘perplexity’ over what should replace it?

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For more from How to Dismantle an Empire, this is the introduction:

and this is What If Money Was No Object?