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Days of Revolt: We’re All Greeks Now

to Days of Revolt. We’re filming part two of our discussion with
Professor Leo Panitch, who wrote The Making of Global Capitalism here in Toronto. And
we’ll be looking at the political war that is being waged by the international banking
system and the neoliberal elite against all of us, but in particular Greece, because Greece
is on the front line, and much of the mechanisms that have been used to control Greece from
the outside are mechanisms that are intimately familiar to the rest of us. Professor Panitch, thank you. LEO PANITCH: Hi, Chris. Glad to be here. HEDGES: So July 16, the Greek Parliament–I
know that you will take issue with Tariq Ali’s assessment of this, but in his words, gave
up its sovereignty to become a semi-colonial appendage of the E.U. PANITCH: I was there on July 16. I think that’s
misleading, insofar as Greece did not have full sovereignty before July 16, and I’m not
sure what states do, perhaps except the American Empire, and to some extent Germany within
the European Union. You can even say Greece hasn’t had full sovereignty since the defeat
of the left at the end of World War II. HEDGES: Right, with the Greek Civil War. PANITCH: And not that it would have had, had
it become a part of the Russian Empire, either. HEDGES: Right. PANITCH: It’s obviously the case that every
state within the European Union, especially the European monetary system, has given up
a portion of its sovereignty, of course, give the balance of power within the European Union.
That means a lot more for states in the southern periphery, and that was most evident for Greece
after the crisis of the euro erupted in 2010. So, no, I don’t feel that they gave up their
sovereignty suddenly as of that day, and I think that the new government elected at the
end of January was well aware in the strategy it was attempting to see through successfully
that it could only be successful insofar as it could achieve its end is within this shared
sovereignty that is the European Union. HEDGES: But it is a kind of extortion, in
this sense. The international banking system and the E.U. know that they could destroy,
easily destroy Greece, which imports hundreds of tons of food–I don’t know why–from Western
Europe. They should be able to grow their own. They owe European drug companies $1.2
billion, which meant that if they walked away from the euro, they would essentially not
have credit. They wouldn’t be able to get–they already have drug shortages in hospitals.
Sixty percent–people are saying 50 to 60 percent unemployment among the youth. Pensioners
have had their pensions cut by 27 percent. I mean, physically Greece is disintegrating,
Athens is disintegrating. And what they really–the message that was
delivered–and it’s why I have a certain sympathy, and as I think you do, for SYRIZA–is that
if you walk away from this deal, you’re going to end up like Allende in Chile or Fidel Castro
in Cuba, which is fuel shortages, bread lines, power outages. Those are the weapons they
have. And this has led the former finance minister, Yanis Varoufakis, to say that in
essence the banks function in the same way that tanks did in the 1967 military coup. PANITCH: As a general proposition, I think
that’s absolutely correct, and I think that, as we were discussing in our last conversation,
the nature of imperialism today is such that it is financial power and the state institutions
that manage financial power that is actually more important. HEDGES: Well, that’s the point of your book. PANITCH: And I think Greece shows this. HEDGES: Right. PANITCH: What has taken place in the Greek
case is that the enormous debt that the Greek state owed to German and French banks primarily
was paid off to those banks with loans that were made to Greece by the institutions, by
Europe, and by the European states. HEDGES: Well, let’s go back, though, a little
bit, because–. PANITCH: It looks like that money came to
Greece and would be used by Greece, but of course it didn’t. HEDGES: It didn’t. [crosstalk] It circulated.
Right. PANITCH: What happened was that in the American
case TARP was used to bail out the Wall Street banks directly. In the European case, with
the Germans’ false propriety around moral hazard, they weren’t going to bail out the
banks directly. They forced Greece to bail out the banks. And they were carrying the
burden of the debt by virtue of bailing out the Deutsche Bank. HEDGES: Right. PANITCH: This is scandalous, of course. In
ethical terms, it’s appalling. But–and this is what also SYRIZA needs to be congratulated
for is that SYRIZA understands very well that the corrupt and clientelist Greek state, for
the most part run by a social democratic party at the time that did this, the PASOK Party,
got Greece into this situation. They joined the euro. It got into the type of arrangements
in the European Union, the equivalent of NAFTA, whereby on the basis of very dubious projections,
Greek agriculture got integrated into European agriculture. We now have mountains of peaches
rotting in Greece. Right? HEDGES: Right. Well, this was Goldman Sachs,
who comes in and helps the former Greek government cook the books. PANITCH: Also cook the books. HEDGES: So that they can get into the euro.
And also I think what’s often overlooked is the deep corruption that was running between
the former Greek government and European–in particular the arms industry. So they were
spending, I think, 3.5 percent to import all sorts of mechanized units that they didn’t
need and taking all sorts of kickbacks. So there was a collusion– PANITCH: Of course. HEDGES: –between a very, very corrupt Greek
government and a very corrupt financial and corporate concerns in Europe that got Greece
into this mess. And it was masked or hidden by Goldman Sachs. PANITCH: Yes. But if I may say so, Chris,
there’s a deeper problem than the corruption that Goldman Sachs or the arms industry are
involved in. The deeper problem is (A) that the Greek state has been clientelist and corrupt
going back to the 1830s. Secondly, that Greece got involved, as all of our states have, in
the development of free trade and free capital movements over the last 20, 30 years. So the result of joining the European Union,
leave aside the euro, the result of joining the European Union is what you pointed to,
the irrationality, right, of specializing in peaches rather than diversifying an agriculture
to meet the food needs of the Greek people. HEDGES: This is what’s happened in India. PANITCH: They’ve lost their furniture industry.
You have a hotel industry that serves tourism. It’s its largest export, larger than olive
oil and wine. Well, the furniture industry used to provide the furniture to Greek hotels.
That furniture industry was wiped out through the European Union. So when people simply
say the problem is getting out of the euro and going to the drachma, they are feeding
an illusion that economy could not survive with the drachma. It would need the kinds
of protections, the import controls, the capital controls, etc., that would allow a broad-based
type of reconstruction of production and consumption inside Greece to take place, which cannot
take place within the common market of the European Union. HEDGES: And this is by design. So, I mean,
you’ve designed a system that, as you correctly point out, cannot sustain itself– PANITCH: That’s right. HEDGES: –unless it gets this kind of infusion. PANITCH: Right. The difficulty is that unlike
Cuba, where the majority of people were subsistence peasants in 1959, the vast majority of Greek
workers had rising standards of living during the 1990s, and indeed the first decade of
the 2000s, and they became full–I remember lineups of masses of people trying to get
into the stock market when it was opened up. HEDGES: Right, but it was an artificial wealth. PANITCH: Of course. I mean, this is the nature
of the problem. But the degree of integration is such that if you try to pull out of this
system now, most people aren’t sure that they want to take that risk. And this makes the
politics of this so very, very difficult. HEDGES: Well, there’s no question that ultimately
this is not sustainable. I mean, there’s no dispute about that. PANITCH: No, they all know this. They all
know this isn’t going to work. And in fact not only the IMF says this very openly–Schäuble,
after all, the very right wing German finance minister, came to that last set of meetings
and said publicly what he felt all along, which is that Greece should be out of the
euro. HEDGES: Well, didn’t they try and–. PANITCH: He had said to Varoufakis, how much
do we have to pay you to get out? HEDGES: Was it 50–wasn’t it $50 billion they
were going to give him to walk–. PANITCH: To get out. HEDGES: To get out. PANITCH: Right? Now, the Germans are mainly
concerned that the European Central Bank act like the German Bundesbank, that is, treat
inflation as the only problem, unemployment as no problem, and above all protect the euro
as though it was the Deutsche Mark. So it’s designed to facilitate German exports. That’s
their main concern. So if Greece is in the euro and it’s causing a problem in that respect,
they want them out. The deal that was done that terrible weekend after they won the referendum
was based on this. Finally, the social democrats around the table,
above all Hollande, said, okay, we ought to give Greece a little more room for maneuver.
Obama was finally putting pressure on–he should’ve put way more on than he had. Schäuble
came to that meeting and said, we want the Greeks out. And instead of the negotiations
being around how much room will we give them to maneuver, the negotiations became around
how do we keep them in and what form of draconian words in the memorandum became the way they
bridged that difference. HEDGES: But why? I mean, if it’s not sustainable–and
I think there’s almost no dispute that this ultimately is not a sustainable arrangement–what’s
going to happen? Why keep them in? PANITCH: Well, it’s moral hazard. It’s designed
to show, as most IMF structural adjustment programs, which also never really work, are
designed to show that people need to subject themselves to the discipline of financial
capital, as you were describing it. HEDGES: Right. PANITCH: That doesn’t say it’ll actually get
implemented, but it sure puts the fear of hell into people. HEDGES: Well, is this done in essence to send
a message to Portugal and Ireland and Spain and–? of the left that’s emerged over the last 20,
30 years. That’s very much intended. HEDGES: Well, in that sense what’s happening
in Greece has nothing to do with economics. Isn’t it a political [crosstalk] PANITCH: Oh, absolutely, it’s absolutely political,
although a lot of the people who are doing it think like accountants and they see that
the state system is structured in capitalist ways. But they don’t think of them as capitalists.
So if you say I’m going to tax profits rather than food, they say, well, I’m not really
sure you’re going to be able to get enough revenue out of taxing profits. We don’t know
what the rate of growth is going to be. They can hire accountants and lawyers to get out
of paying taxes. We know that people need to eat. So put the tax on–a sales tax on
food. HEDGES: Right. Well, that’s–Ward Churchill
called them little Eichmanns, I think. PANITCH: Yeah, exactly. HEDGES: It’s just about making the system
work. PANITCH: Yeah. Hannah Arendt understood it
in a lot of ways. HEDGES: Right. It has nothing to do with whether
people actually are malnourished or not,– PANITCH: Exactly. HEDGES: –which–I can’t remember the figures,
but, I mean, the number of–at this point we’re talking about malnourishment as a real
phenomenon within Greece. PANITCH: Yes. And one should remember that–and
I don’t think that they will renege on this, although the memorandum requires them to–the
left is screaming they have already; they have not, and I don’t think they will. The
humanitarian stuff they introduced immediately in February, right after they were elected,
has not been pulled back, and it’s had an enormous impact on the people who are suffering
the most. HEDGES: What does Greece tell us about the
world we live in? PANITCH: I think it tells us that reform in
the 21st century, in terms of the old debate about reform versus revolution, is probably
no longer possible within capitalism. Those who had an ambition of humanizing capitalism–and
most of the American left, the more North American left, including the Canadian left,
has had the impression that Europe represents a more humane variety of capitalism. HEDGES: Let me just interrupt there to say
an important point that you’re well aware of is that the representatives of the left,
including the NDP, which may win the Canadian election, were entities that were created
to supplant the radical left, just as the NAACP was created to counter the Communist
Party and that much of what represents the left within the United States, and even in
Canada, is already an accommodationist– PANITCH: Yes, obviously. HEDGES: —entity. PANITCH: But the NDP gives the impression–and
runs on this–that the European Union is evidence of a viable, humane, egalitarian capitalism
that can be both competitive and just, that can meet the neoclassical standards of capitalist
efficiency and be egalitarian. This is an illusion. It cannot. It’s not been true of
the European Union. The claims about it that are made by the left in Europe and in North
America are incorrect. The European Union is on the same neoliberal track. It has neoliberalism
in its DNA. And this means that the room for reform, as it was understood in the 20th century
from the New Deal on, from the welfare state on, the room for that is very, very limited. HEDGES: Well, you make the point in the book
that the–if you want to call it the humanization of neoliberal economics was caused by fear,
fear of a revolutionary movement. And as we said in the first segment, you quote Roosevelt,
who uses the word. And the eradication of that counterweight essentially allowed neoliberal
economics to become purely predatory and destroy the liberal mechanisms that once made piecemeal
and incremental reform possible, because I think, as you very correctly say, without
that counterweight, there’s no impetus for any kind of reform. PANITCH: Yes. But the situation now is actually
more problematic. Because of the strength of labor movements and because of their support
for social democratic parties and the Democratic Party for a certain period in the United States,
where it had some effect, you won those reforms, but those reforms ended up screwing up capitalism.
It is indeed the case that when workers aren’t fearful, when they live under conditions of
full employment, they make demands which do impinge on the dynamism of capitalism and
on its efficiency. Now, so it isn’t just a matter that bad guys
didn’t like this, unethical people, immoral people didn’t like this; the system wasn’t
working by the crisis of the ’70s. And insofar as it wasn’t working and the left wasn’t able
to move beyond those reforms, including all the unions, to get beyond those reforms, which
where accommodations to capitalism, as you said, to actually a new set of social relations,
a new way of producing and consuming through democratic economic planning, sure, the room
was then opened for those are saving the system. HEDGES: Right. But it was the capitalists
that created those quote-unquote reformist [crosstalk] PANITCH: It was capitalist-created, but it
was also the left’s failure. And it is the left’s problem today that when we say there
isn’t room for reform, well, what does it mean to say we need a revolution in the 21st
century? HEDGES: Well, that’s a good question, because
we’re all Greeks now and we’re all having austerity rammed down our throat. We’re reconfiguring
the global economy into a kind of form of neo-feudalism. So what does it mean to have
revolution? PANITCH: Well, that’s why I think that those
of us outside of Greece should be very modest about attacking SYRIZA for having caved, betrayed,
etc., etc. This is damnedly difficult. We need a lot of modesty. We need a lot of careful
thought. We need to build–it took 30 years to build what SYRIZA became. We need to have
the kind of long-term perspective to build the types of organizations that need to go
beyond what SYRIZA is. HEDGES: But you’re talking about revolutionary
organizations, right? PANITCH: Yes, but I don’t know that that necessarily
has to mean insurrectionary ones. One of the things that the left needs to learn from the
20th century is that the way the left beat itself up then over reform versus revolution
often meant insurrection versus parliamentarism, rather than–and insurrection didn’t necessarily
lead to anything all that damn good either. So I think we need to get past that old debate
and reformulate it in new ways. That’s a topic for another interview, probably. HEDGES: Well, what does that look like? PANITCH: Well, I think, as opposed that old
debate, I think we need to try to find ways of doing electoral and parliamentary politics
which have revolutionary implications. I think that means linking up, is SYRIZA did, to the
social movements in a way that overcomes what has been the anarchism of the social movements,
the anti-party orientation of the social movements. HEDGES: Right. Well, you build movements.
I mean, revolutionary movements traditionally build movements that have a political expression. PANITCH: Yes. And–. HEDGES: But the movements are paramount. PANITCH: I think that’s right, although what
was the case at the beginning of the 20th century, when syndicalists and anarchists
were very anti-party and had a notion that what revolution was about was doing away with
state, you saw that again at the beginning of the 21st century, after the–given the
disappointments with the communist parties and the social democratic parties and the
Democratic Party. You saw a strong anarchist current on the left, which was oriented to
street protest. And while I think that was marvelous and impressive, you can protest
forever and you won’t change the world, unless you get into the state and transform it. Therefore we need the type of left that puts
a lot of thought and a lot of preparation into how do we democratize the state, how
do we build up people’s capacities to link up with that state, to change in their local
communities the ways that they relate to each other in production and consumption. One of
the defects of SYRIZA, the main one, I think, is that they weren’t organizing with the solidarity
networks to develop alternate plans for, say, transforming Greek agriculture so you didn’t
have the mountains of peaches and you weren’t dependent on your European food subsidies
that produce these mountains of peaches. That I think was what SYRIZA needed to develop
much much more. And that’s what I criticized the before. HEDGES: And that is true, for instance, within
the United States or Canada or anywhere else, where it is about returning to a kind of local
autonomy–you see it with the food movement–so that you can in essence break the back of
these centralized forces that distort the economy to create particular cash crops and
mono crops and everything else. And so, in many ways that’s the big question: does it
really begin almost at the grassroots, where you transform your own town, your own society,
your own village, local currency, and then does it drift upwards? PANITCH: I don’t think so. I think one needs
to look at it, if I may use this word, more dialectically. I think that can’t take place
without at the same time changes being made at the national level, because for one, certain
local areas that have more resources than others will be better positioned than others.
But secondly, very little can be done at a local level unless changes are simultaneously
made at higher levels, given the degree of integration of the local into the global.
So I think it’s a simultaneous thing. Moreover, I don’t think that the type of politics, depth
of politics we’re talking about is generated just at the local level. I think it requires
national political parties who take the responsibility of developing at the local level the capacity
to think of alternate ways of production at that local level, which is not merely selfish,
and think of forms of representation from the local level to the regional level to the
national level where the inequalities that exist and will exist amongst the different
localities, given their different resources, capacities, etc., will inevitably have to
be bargained, ameliorated, etc. HEDGES: I mean, you can say this because you’re
a Canadian and you don’t live in a closed political system, which we do within the United
States. I mean, there still is a possibility for third-party movement. There’s still–and
I think, unfortunately, at the national level we’ve been as citizens completely frozen out.
But every country has to respond to its own reality. PANITCH: Well, I’m of the view that until
the American left gets, if I may use this word on camera, its shit together, whatever
we do outside of the United States will be highly constrained. So you guys better pay
attention to what you can do at the national as well as the local level from our own perspective. HEDGES: Well, hopefully we won’t bring you
all down with us. Thank you very much, Leo. PANITCH: Good to be with you, Chris. HEDGES: And thank you for watching Days of

Reader Comments

  1. Wow, this is the kind of intellectual, rational conversation that we need more of. Thank you Chris for interviewing Leo, and thank you Leo for being an example of what can be be produced with a rational objective view of the world which we all inhabit. This has inspired me to continue working towards a better political / economic system to better meet the needs of our society.

  2. Leo has it backwards. The state came after capitalism i.e. it is a creation of the capitalists. You cannot reform the state apparatus. You can only smash the state as its primary purpose is to facilitate and apply the rules of capitalism to the people.
    The state is the authority of capitalism, it is not an objective institution that just so happens in the present day to operate in a capitalist fashion.
    The state has to be dismantled and only then can society be built from the ground up as a truly democratic, worker controlled system.
    Leo contradicts himself when he explains that reforms are no longer possible and revolution is needed because the very word "revolution" means a complete change of the current system. A revolution is not gaining control of parliament because parliament is constrained within the power structure of capitalism. Capitalism is bigger than parliamentary democracy so why waste your time trying to get to the top of a political system; once you do you will realise, much like syriza did, that you don't have the power you think you did!

  3. Manufactured insecurity which only benefits middle men/women who frame the system to create an interdependence that is built to fail as a method of controlling populations. Thanks for your perspective.

  4. Don't let this socialist force you to make the choice between left and right. They are both in the same matrix and both oppressive, immoral, unethical forces. Decentralization is the only way we can rid ourselves of this self-fulfilling plague of slave masters.

  5. Interesting…. If I follow part of this discussion say 8:30 to about 9:08 am I hearing a possible microcosm of USA/NAFTA/TPP (at least with regards to declining production segments)? Certainly trade deals can infringe on national sovereignty issues which is entirely another matter. A difference I heard slightly later is German's central bank only concern with inflation vs the Fed concerned (or at least chartered) with the dual issues of inflation and employment? Looking for more insight on this.

  6. A nation that doe's not print it's own currency can not be a sovereign nation, America has not been a sovereign nation since 1913 when the Federal reserve act was put in place. True capitalism vanished with the Central bank system, with out true competition you can not have a workable capitalist system. The problem is the CENTRAL BANK SYSTEM, when a handful of shylocks own the planet how in the hell can you have a workable capitalist system.

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