Greece ‒ grease, or a new engine?

So what’s going to happen in Greece? Some sort of fudge with the government’s debt to be repaid but, conveniently, with no date set for repayment? Or GREXIT, with Greece being kicked out of the Common Market?

Put another way, will they try to grease a worn-out engine, or is a new engine needed?

Does it matter? It might be asked. After all, Greece’s population is only eleven million out of Europe’s five hundred million, and its GDP is only 1.5% of Europe’s.

Well, it matters alright, and in a big way because the Greek situation is the exploding boil signifying a much deeper and wider problem.

The essence of the problem is that mainstream economics is a corrupt failure; the global banking system is a corrupt failure; and there is a selfish elite concerned only with sucking up wealth to itself.

At the centre of economics, banking and elite is a simple belief, namely, that everything is fundamentally sound, efficient and fair and it only needs some patience and sacrifice (for everybody except the rich, of course) and all will be hunky dory. Indeed, central to the belief is the assertion that the existence of the rich is very important because, it is claimed, it is their wealth and income which “trickles down” to everybody else.

That, of course, is a lie. The rich never, ever, spend all their income. They save virtually all of it and then claim to invest it for everybody else’s benefit.

And THAT is the crux of the problem. Even if the rich do invest it is investment in an economy from which true demand has been drained. Without that demand the economy fails.

Thus investment must not be only for production owned solely by the rich. It must be for the spreading of production into the hands of everybody so that everybody can produce in some way thereby ensuring that they can legitimately consume.

Both Adam Smith and JB Say were very clear about this. They said that producers and consumers must be the same people and, if they are not, everything fails.

This is basic free market theory which is completely ignored today. Indeed, ‘trickle down’ theory deliberately ignores that theory. It wants to spread nothing: it only wants to concentrate ownership and cares not a fig for the mass of the population. In short, ‘trickle down’ economics is as profoundly anti-democratic and economically inefficient as it is possible to be.

Thus the Troika (IMF, European Central Bank and European Commission) continues with policy that not only fails to spread productive ownership but narrows its ownership. Put simply, the Troika has no intention of addressing the biggest and most necessary need of all which is for employment. Instead, it cuts unemployment benefits and pensions in every way that it can. This not only destroys the lives of the individuals affected but guarantees that the economy as a whole will never recover and, instead, become a land where the rich can pick up endless prizes at bargain-basement prices.

There is much to be proposed and much can be done (the Syriza government in Greece already has forty main policies) but the first key policy must be that the central bank should use its ability to issue money not for the rich and their ownership of existing assets but for the construction of big public capital projects. This is the only way to get those jobs going. Unemployment in Greece is officially 27% which means that, in reality, it is much higher. And unemployment for the young is always around double the official figure.

At the moment Syriza is steadfastly, and wisely, refusing to take any more loans from the Troika. As soon as any loan is received it would go straight back in the form of interest payments and the Greek government’s debt (120% GDP in 2010 and unrepayable then) will rise well past the nearly 180% it is at present.

Under huge pressure (and it must never be forgotten that individual members of the government will be blackmailed, bribed and coerced so that they surrender) the Syriza government must be supported in every way possible because its fight, is everybody else’s fight (with the exception, of course, of the 1% elite).

Nor should we rely on other people doing the fighting for us. It is heartening that Podemos in Spain and the Five Star Movement in Italy are stirring. However, also stirring are the forces of fascism which intend using a combination of the ubiquitous spying apparatus and a militarized police to introduce an oppressive fascist state using not just fiscal waterboarding but real waterboarding as well.

A fudge is looking increasingly unlikely and GREXIT is rising as the possible outcome. In which case, a new engine will be needed for Greece AND for Europe. In both cases that engine must be, in the first place, the use of the central bank for big public capital projects because, without them, the economy will never be able to get going again.

Fortunately, after a proper audit of the financial situation, Syriza’s main demand is to change the role of the European Central Bank so that it finances States and programs of public investment.

That’s a good start and we must back them in every way that we can because Greece’s problem will very soon be ours as well.

RS/NN

Press TV’s website can also be accessed at the following alternate addresses:

www.presstv.co.uk