Currencies are not the problem


In an article originally published on his website on October 24, Roy Ratcliff
looks at the European debt crisis


As the debt crisis unfolds and financial markets continue to implode, ‘elite’ actors in politics and finance, along with their supporters in the media, are increasingly anxious to point the finger of blame away from themselves and the system they uphold. To create suitable distractions they are currently inclined to project attention toward any convenient scapegoat. One method used early this year was to ‘blame the victims’. Working people throughout Europe and North America, for example, were variously accused of a) living beyond their means; b) being idle; and c) benefit scroungers. In the European News media, more recently, the Greek people were particularly targeted as being lazy and as devious tax-dodgers. We should not really be surprised at this. Blaming the Victim, has been the classic method chosen by those in authority to shift attention and blame from its real source onto a surrogate and usually powerless target. However, this technique can only work if enough people fall for it.

The latest target, selected in order to focus public attention away from the real source of the systems progressive disintegration, has been identified as the Euro. In this way, some in the ’political establishment’ hope to convince people, that ‘saving’ the Euro is what is urgently needed. Others assert that leaving the Euro is the only solution for Greece and other countries in difficulty. As if changing the name on the piece of paper currently used by certain countries, will solve the underlying problems of the crisis. This is despite the obvious fact that the present crisis notably broke out in the USA, and thus within the realm of the dollar. A fact which is conveniently overlooked. Also overlooked is the fact that the crisis quickly moved to the UK – the arena of the pound sterling. Yet there has been no call to ‘save’ these particular currencies. The originating source – ‘toxic loans’ and the secondary contagion of crisis indicates that it has nothing whatsoever to do with the designated name attached to the official medium of exchange. Nor is it the case that currencies are like sick people and animals who fall ill and need ‘saving‘.

It also seems to have been conveniently forgotten that similar economic and financial crises occurred in 1929 under the currency of the dollar after the 1929 Wall Street crash and in 1930’s Germany under the German currency of the Deutsch-Mark. Closer to our own time, at the turn of the 21st century, huge socio-economic problems occurred in Argentina operating with their currency of the Pesos. To further emphasise this point, in recent weeks a problem has occurred with the availability and stability of currencies in Switzerland and Russia. However, volatility in these countries has also not been caused by the name on their respective pieces of paper or the designated sign in the electronic legers of the banks. The banal diversionary act of blaming the Euro (or any other currency) for the manipulative activities of currency speculators and the odious debts undertaken by governments is therefore a complete nonsense. Only elite human manipulators of an already unstable system can create such economic and financial turmoil as we are now currently experiencing. In the real world, an inanimate piece of paper, such as a currency can do nothing and cause nothing – only a wildly active and desperate imagination could think or pretend otherwise.

The motive which really lies behind the concepts of ‘saving’ the Euro or of ‘leaving it‘, is to bail out the bankers and bond-holders. It is about saving the current unjust economic and political system, tied as both sectors are, to exploitation. In actual fact, as noted, the crisis has been caused by fundamental contradictions within the economic and political system – acted upon by the elites in control – all else is simply a diversion or a deception. The solution to the crisis, therefore, does not lie in changing the currency, countries leaving the European Economic Community, devaluing the Euro, further bailing out the banks, more quantitative easing, or frantically selling off national assets. The way to a solution for the majority, requires a different analysis and a different starting point. [see Capital and Crisis and Plan B; there is no Plan B’ at for a fuller analysis.] But it needs to be stressed that such a solution will not be fashioned or brought closer by setting buildings and cars on fire.

Burning cars.

The recent spectacles of torched buildings, burning cars, thrown petrol bombs and beating up rival groups of demonstrators (as recently occurred in Greece) is very far from leading toward a solution to the present crisis. These types of responses should be curtailed and not be repeated or replicated elsewhere. At the best, such acts represent a blind, but counter-productive fury, and at worst they are the acts of deliberate agent provocateurs. Whatever the intentions of such violence, the results will be to distract attention from the real causes of the crisis as well as from the real agents of its further intensification. This type of action will also split the necessary unity of any campaign which will be needed for a defensive struggle against the austerity measures intended by politicians and the powerful agencies of the various states. For it is the latter, not buildings and vehicles, who seek to impose a solution suitable to them and the system they represent.

Such nihilistic and aggressive behaviour, as that noted above, will only ensure many people stay off the streets and away from any protests. That would be an outcome which will weaken the resistance to austerity plans and be entirely to the satisfaction of the various authorities. Burning cars, throwing petrol bombs and sectarian infighting will not make the politicians and state officials change their minds and reverse their decisions, because the system they uphold requires the measures they are taking. Only radical alterations to the system, will resolve the problem in favour of the mass of ordinary people and alterations to that system will only come from a campaign combining large numbers, unity, patience, discipline and persistence. I suggest an alternative and assertive focus should be introduced into any campaign which seriously challenges the intended austerity measures in Europe and North America. It should consider including the 5 proposals contained in the following section.

Asserting alternative proposals.

1. Cancellation of the ‘Odious’ State Debts.

For the last 50 years, governmental debt in all countries, particularly in Europe and North America, has been rising, whilst income has been falling. As businesses left Europe and North America for low-wage countries, unemployment rose and income tax-payments fell. This economic fact was not created by the working people of Europe and North America, nor was it caused by the denomination of the currency. The crisis we all face is a crisis of the entire system and therefore, as noted above, cannot be cured by changing the name of the currency or by bailing out bankers and bond-holders. The growing difference between the shrinking amount of state income and growing state expenditure has been filled by government borrowing from the issue of government ‘bonds‘. These ‘bonds’ much of them used to fuel immoral, if not illegal wars, and weapons manufacture amount to ‘odious debts’ that were not democratically sanctioned by their respective citizens. For this reason, they should be rejected and cancelled by the populations of Europe and North America as part of their anti-austerity campaigns. What really needs ‘saving’ are the jobs and welfare of millions of ordinary citizens. Rejection and cancellation of the state debts will eliminate the need for austerity and free up resources for alternative employment projects.

2. The abolition of financial speculation.

It is not difficult to demonstrate, in clear and concise terms, that a considerable amount of the present problem has been caused by the existence of financial speculation and the creation of fictitious capital. It is very much in the public domain that the collapse of the banking system and its bail out in 2008, was as a result of financial speculation in the area of ’toxic mortgages’ packaged within the US and European derivatives markets. This entire industry is – even in normal times – an increasingly parasitic outgrowth fastening onto the production and exchange of goods and services. Over the last two decades it has mushroomed uncontrollably. This sector represents the economic equivalent of an invasive cancer continually eating away at a healthy body until a critical juncture arrives and the entire body finally collapses, having been destroyed from within. That juncture has again arisen and the political surgery necessary to campaign for is the complete removal of this damaging cancerous growth. Ending financial speculation will ensure that any further or future economic activity will not be distorted or jeopardised.

3. The establishment of Popular Democracy.

It is clear, throughout the entire world, that the existing forms of democracy are a complete sham. Citizens are at best allowed to vote freely once every few years, for who shall staff the Senates, Parliaments or Congresses. At worst their votes are influenced by big money, tall tales or rigged by despots. No citizen gets a say in what is spent of their tax-money, nor how it is spent or where it is spent. All the important decisions effecting the livelihood, welfare and well-being of millions upon millions of people are taken by a small coterie or political oligarchy of elite agents with economic and social ties to those with the largest amounts of wealth. The political system is thoroughly corrupt and systemically corruptible. Changing the ‘faces’ that staff it, changes nothing substantially. It is the political system itself which needs changing. A form of popular democracy such as the local and national People’s Assemblies which successfully emerged for a time in Argentina needs to be campaigned for, created and sustained. A more popular form of democracy, will ensure that any future developments in any field will have to have the backing of the majority.

4. The defence and democratisation of Public Services.

High quality, well staffed public services are essential to the well-being of any developed community. Public services in general are not a drain on social productivity as is often made out. Indeed many, such as education, health, sanitation, leisure services, libraries etc., add to the productivity as well as the efficiency of economic life and the pleasures of social life. The usefulness, responsiveness and value of public services can be improved if they are made less hierarchical, more egalitarian, more client focussed and jointly accountable to their employees and clients. The levels of staffing, remuneration, pensions and entitlements for ordinary should become the base line for all forms of employment. The ‘right to work’ is supposed to be enshrined in international law and should therefore be enforced. In addition, all human beings who work should be entitled to decent living standards and security in old age. The intellectual and practical defence of re-vitalised, democratised public services and the establishment of egalitarian co-operatives is the only way to ensure these rights and should be part of any anti-austerity and pro-employment campaign.

5. Unity: Overcoming divisions.

It is obvious that the powers that be, who wish only to retain the existing system and continue to profit from it, will wish not only to distract, but also to divide. The existing divisive ideologies of superiority, such as those based on; race, nation, gender, religion or political sect, therefore need to be combated. Working people of all ethnicities, religions, genders, sexual orientations or political persuasions have more in common than these secondary differences, which should be respected, but not be predominant. One axis of a divisive strategy will be to play upon, and actively promote divisions based upon these differences. Sectarianism, both religious and political are particular dangers to any unified campaign. And only a unified campaign has any real chance of success. For this reason, considerable efforts will have to be made to both combat the ideologies and to include authentic, grass-roots representatives of various sections within any overall campaign. Certain people, will assume they have superior qualities which warrant them greater access to decision-making and/or leadership positions. This should be guarded against for at least three reasons. First, it will alienate many potential supporters. Secondly, one or two people’s intelligence cannot be as ultimately effective – on any question – as that brought to bear by larger numbers. Thirdly, a movement accustomed to relying on established leaders is easily misled or rendered helpless with the leaders possible removal. For these reasons the utmost democracy should be practiced at all levels in the structure any emerging campaign.

Be the first to comment

Leave a Reply

Your email address will not be published.