You’ve argued in recent years that the trajectory of “democratic capitalism” in Europe has increasingly been in the direction of a social and economic model that prioritizes the imperatives of the market and of business profitability over the requirements of democratic equality and social solidarity. Can you talk a little about how that process has unfolded, and how the eurozone crisis that broke out after 2008 fits into this picture?
Democracy under capitalism is democracy to the extent that it corrects the outcomes of markets in an egalitarian direction. Economic liberalization disconnects democracy from the economy — makes it run dry, as it were. The result is what is called post-democracy: democratic politics as a mass spectacle, as part of the entertainment industry.
One way democracy is decoupled from the economy is by a transfer of economic policy out of the hands of national parliaments and governments to “independent” institutions such as central banks, summit meetings like the European Council, and international organizations such as the International Monetary Fund (IMF).
The euro, as instituted by the Maastricht Treaty, has in this way de-democratized (although by no means depoliticized) monetary and economic policy-making in its member states. Substantively, it has imposed a hard-currency policy on the whole of Euroland, one under which some countries, like Germany, can prosper while many others cannot.
One theme of your recent writings on “democratic capitalism” has been a deep-seated pessimism about the prospects for a democratic resurgence against austerity. Social democracy no longer seems to be the road to a more egalitarian model of capitalism; meanwhile, the left parties and union movements constituting the democratic opposition to the worst of market effects have been seriously weakened. Do you see any possibility for the revival of left-wing, democratic movements against austerity?
Briefly on “austerity.” It is not that public debt has been cut back since 2008. Quite to the contrary — it has significantly increased, due to low growth and the public absorption of private debt. It is also not the case that non-austerity would be the solution to our problems.
We have had constantly increasing debt levels, private and public, since the 1980s, in parallel to the global expansion of the international financial industry. Today a growing share of the accumulated debt is being held by central banks as assets, paid for with freshly printed money.
Money printing has been going for decades now, blowing up the money supply — and had no impact, not even on the rate of inflation, presumably because the money never got into the hands of those who would spend it, or invest it in the “real economy.”
As to the Left, I think you describe the situation correctly. Social democrats have thought they could ride the market, to make it subservient to social purposes; for example, relying on privatization to make social services more responsive to citizens-renamed-customers.
In the course of events they sacrificed the dignity of the public sphere and subjected its operation to the imperative of profitability. They also became agents of capitalist expansion at a time when capitalists were desperately looking for new business.
In the process they lost contact with a large segment of their popular constituency — those unable or unwilling to “play the market,” for example with their old-age pensions.
As for left parties, like Podemos and Jeremy Corbyn — don’t forget Bernie Sanders! — we will see; in particular, Corbyn may be the last chance before the rest of the working class ends up in tow of right-wing populism. In any case, more effective forms of mass mobilization and direct action must be found, to bring voters back, and hopefully it will be possible to rebuild trade unions one way or other.
What makes me pessimistic, though, is the fate of Syriza — how they caved in to the pressures of the other governments, of the IMF, of their own middle class — and perhaps of their strange illusions on “the European idea.”