Has the crisis proved Marx right....

[Ghyl Tarvoke]

... in regards to his quote about all great events in history happening twice, first as tragedy and then as farce?

I was thinking about this while reading this article from the great Jacobin magazine: http://jacobinmag.com/blog/2012/06/what-are-the-bankers-up-to/ and started to compare this period mentally to the last 'crisis' period of roughly 1978-1984 and the push towards "neoliberal" type reforms in that period. While I don't totally agree with the all of the article, I'm strongly leaning towards answering my question as "yes". Any thoughts?

(And yes, the thread title was really an attempt at troll bait. Especially of those serious, respectable types of posters. You know who you are).

[The Mikado]

That quote was always something of a truism, in that events will naturally reflect/harken back to previous sets of events.

[Ghyl Tarvoke]

That quote was always something of a truism, in that events will naturally reflect/harken back to previous sets of events.

Sshh... Don't ruin my perfectly good troll bait.

[Gustaf]

Decent trolling, but I guessed what you would be referencing from the thread title.

Anyway, since you say that you're trolling I will assume that you were as amused as I by the lack of understanding in the article you provided (I'll grant that it's really hilarious when people who don't know the first thing about a subject think they uncover something).

I've viewed this crisis as a bit farcial but then again I view most things through that lens. Makes things easier. If it really turns bad that will be harder, of course.

[Beet]

I will post about it anyways.

The Communist Manifesto was a document of the moment, of a few years' zeitgeist. By the Crystal Palace Exhibition it was in deep crisis. By the time the improvement in living standards of the British working class began to be confirmed, the entire theory was discredited. And never would it have emerged from status as an obscure intellectual movement had it not been for one wrong turn in a little city called Sarajevo...

Great article, by the way. The Mandarins at the ECB know that they have short-circuited democracy and to them it is the greatest invention since sliced butter. They fully know what they are doing, to use their power to declare class war on European labor.

[Ghyl Tarvoke]

Decent trolling, but I guessed what you would be referencing from the thread title.

Anyway, since you say that you're trolling I will assume that you were as amused as I by the lack of understanding in the article you provided (I'll grant that it's really hilarious when people who don't know the first thing about a subject think they uncover something).

I've viewed this crisis as a bit farcial but then again I view most things through that lens. Makes things easier. If it really turns bad that will be harder, of course.

The article is silly in places, yes, but I think the general point still stands. What the ECB is doing more driven by ideology than it is by any notion of economic rationalism, and so the notion that greater European federalism by-itself is necessarily the exit route out of the crisis is nonsense. See: Greece.

[opebo]

...What the ECB is doing more driven by ideology than it is by any notion of economic rationalism

For them it is the same thing, n'est-ce pas?

[© Tweed the Younger]

if not, May 10 2011 did.
http://uselectionatlas.org/FORUM/index.php?topic=152792.0

[Gustaf]

Decent trolling, but I guessed what you would be referencing from the thread title.

Anyway, since you say that you're trolling I will assume that you were as amused as I by the lack of understanding in the article you provided (I'll grant that it's really hilarious when people who don't know the first thing about a subject think they uncover something).

I've viewed this crisis as a bit farcial but then again I view most things through that lens. Makes things easier. If it really turns bad that will be harder, of course.

The article is silly in places, yes, but I think the general point still stands. What the ECB is doing more driven by ideology than it is by any notion of economic rationalism, and so the notion that greater European federalism by-itself is necessarily the exit route out of the crisis is nonsense. See: Greece.

No, I don't think that's true. The crucial piece missing from their 'analysis' is that the case for structural reform IS economic (and has been made for quite some time).

In fact, the people on that side would argue that much of the current crisis was brought about by the lack of such reform. Thus, the difference in the debate isn't so much ideological.

Most economists would agree that a) long-run reform is needed and b) short-run stimulus would be good. In fact, I'd say the consensus for a) is much stronger than that for b).

The difference is that some think a) can't be achieved if b) is done. Others, like Krugman, think the costs of not doing b) are too great. This is an old debate in economics which I think is not clearly decided (hacks on both sides will claim otherwise, of course).

So the article basically comes off as being completely clueless. They don't seem to understand what the debate is actually about.

They are trying to 'reveal' that people oppose the stimulus in order to achieve structural reform  when this has never been hidden by anyone ('omg, look they practically admit it!') - this is a completely open agenda. It can be open because it has clear reasons for it that aren't political machinations.  

[Torie]

That is part of the debate about the stimulus Gustaf. The other part is just what the multipliers are, and where, and where not, and how it is financed. I think there is also a "consensus" that the higher your existing debt, and the worse your cash flow/deficits are, the more "costly" doing stimulus is to effecting long term fixes.

[Beet]

Gustaf,

I think you are the one missing the point. Even if you concede that there is an economic case for structural reform, it does not follow that economists should have the right to do anything more than state their case. The ultimate decision should be left up to the political arena. Hence, the debate is really about politics.

The primary apology for the ECB is not that they want to prolong the crisis to force governments to enact structural reform. The primary apology has usually been (1) denials of how bad the crisis is. Go back and look at the official statements from the eurocrats since Spring of 2010... we have always been turning the corner, the worst has always been past, Greece has always been on the right track, and (2) claiming that it's not the ECB's 'role' to care about anything other than inflation, even when whole countries are slipping into recession or even depression. The quotes in the article do contain somewhat of a perspective from these eurocrats and their motivations that, if not exactly hidden, hasn't really been sufficiently questioned either.

[Ghyl Tarvoke]

No, I don't think that's true. The crucial piece missing from their 'analysis' is that the case for structural reform IS economic (and has been made for quite some time).

Yes, of course. But so far it has been demonstrated that in reality "structural reform" means wage cuts, social welfare cuts and busting unions. Improving tax systems, reducing corruption... well, due to the lack of money in the system, the opposite is happening, Greece's transparency international rating has actually floored in the last two years, for example. To defeat these things need investment, not constantly shouting "structural reform" while impoverishing everyone, which so far seems to have been "standard" strategy.

In fact, the people on that side would argue that much of the current crisis was brought about by the lack of such reform. Thus, the difference in the debate isn't so much ideological.

Well, that proves that they haven't been paying attention. There has been, since 2008, almost zero reform towards how to prevent this for happening again (I'm talking about the banks, which in the Irish and Spanish case is the sole reason for either country having a sovereign debt crisis). The European debt crisis has acted as smokescreen in which the regulars can noisily beat their drums about "painful reforms" (which, of course, are painful for nearly everyone else but themselves) while ignoring anything that inconveniences their view of the world.

Neoliberals are ridiculous purists. In true old-school Marxist fashion, the problem is always that the system wasn't applied sufficiently. Therefore, the problems of Greece, Spain, etc (let's ignore the large differences, shall we?) were the fault of Crony Capitalism (Is there any other kind?) or Unions or some other ridiculous obstacle to a purely liberal economy that has never existed anywhere except in the minds of ideologues who have spent too much time reading economics textbooks.

Most economists would agree that a) long-run reform is needed and b) short-run stimulus would be good. In fact, I'd say the consensus for a) is much stronger than that for b).

The difference is that some think a) can't be achieved if b) is done. Others, like Krugman, think the costs of not doing b) are too great. This is an old debate in economics which I think is not clearly decided (hacks on both sides will claim otherwise, of course).

What bis "reform"? How do we achieve this?

So the article basically comes off as being completely clueless. They don't seem to understand what the debate is actually about.

No, it's just to the writers of the article, that debate is irrelevant and obscures what is really going on.

Again, I repeat myself, for all the talk of 'reform' that so far has not actually meant anything other than "punishing people for the sins against liberal dogma"* (without thinking of any practical proposition to solve the issues of corruption, public sector waste, etc). "Structural reform" has just become a catch-all phrase used to replace anything that resembles thought.

* (and don't dare that this sort of sadism hasn't been driving part of general Eurozone policy towards, at least, Greece.)

They are trying to 'reveal' that people oppose the stimulus in order to achieve structural reform  when this has never been hidden by anyone ('omg, look they practically admit it!') - this is a completely open agenda. It can be open because it has clear reasons for it that aren't political machinations.

So basically you are arguing that what was said it in the article is completely correct but doesn't matter but it doesn't fit into your "economic arguments" and "everyone knows that anyway". Yeah, whatever, and you wonder why I have grown to dislike your posts.

Also what Beet said.

[Gustaf]

Gustaf,

I think you are the one missing the point. Even if you concede that there is an economic case for structural reform, it does not follow that economists should have the right to do anything more than state their case. The ultimate decision should be left up to the political arena. Hence, the debate is really about politics.

The primary apology for the ECB is not that they want to prolong the crisis to force governments to enact structural reform. The primary apology has usually been (1) denials of how bad the crisis is. Go back and look at the official statements from the eurocrats since Spring of 2010... we have always been turning the corner, the worst has always been past, Greece has always been on the right track, and (2) claiming that it's not the ECB's 'role' to care about anything other than inflation, even when whole countries are slipping into recession or even depression. The quotes in the article do contain somewhat of a perspective from these eurocrats and their motivations that, if not exactly hidden, hasn't really been sufficiently questioned either.

As I thought you know I'm not a big fan of the ECB, nor of so-called technocratic rule. Sure, it doesn't follow that economists have the right to do anything more than state their case. Where am I claiming otherwise?

[Gustaf]

No, I don't think that's true. The crucial piece missing from their 'analysis' is that the case for structural reform IS economic (and has been made for quite some time).

Yes, of course. But so far it has been demonstrated that in reality "structural reform" means wage cuts, social welfare cuts and busting unions. Improving tax systems, reducing corruption... well, due to the lack of money in the system, the opposite is happening, Greece's transparency international rating has actually floored in the last two years, for example. To defeat these things need investment, not constantly shouting "structural reform" while impoverishing everyone, which so far seems to have been "standard" strategy.

In fact, the people on that side would argue that much of the current crisis was brought about by the lack of such reform. Thus, the difference in the debate isn't so much ideological.

Well, that proves that they haven't been paying attention. There has been, since 2008, almost zero reform towards how to prevent this for happening again (I'm talking about the banks, which in the Irish and Spanish case is the sole reason for either country having a sovereign debt crisis). The European debt crisis has acted as smokescreen in which the regulars can noisily beat their drums about "painful reforms" (which, of course, are painful for nearly everyone else but themselves) while ignoring anything that inconveniences their view of the world.

Neoliberals are ridiculous purists. In true old-school Marxist fashion, the problem is always that the system wasn't applied sufficiently. Therefore, the problems of Greece, Spain, etc (let's ignore the large differences, shall we?) were the fault of Crony Capitalism (Is there any other kind?) or Unions or some other ridiculous obstacle to a purely liberal economy that has never existed anywhere except in the minds of ideologues who have spent too much time reading economics textbooks.

Most economists would agree that a) long-run reform is needed and b) short-run stimulus would be good. In fact, I'd say the consensus for a) is much stronger than that for b).

The difference is that some think a) can't be achieved if b) is done. Others, like Krugman, think the costs of not doing b) are too great. This is an old debate in economics which I think is not clearly decided (hacks on both sides will claim otherwise, of course).

What bis "reform"? How do we achieve this?

So the article basically comes off as being completely clueless. They don't seem to understand what the debate is actually about.

No, it's just to the writers of the article, that debate is irrelevant and obscures what is really going on.

Again, I repeat myself, for all the talk of 'reform' that so far has not actually meant anything other than "punishing people for the sins against liberal dogma"* (without thinking of any practical proposition to solve the issues of corruption, public sector waste, etc). "Structural reform" has just become a catch-all phrase used to replace anything that resembles thought.

* (and don't dare that this sort of sadism hasn't been driving part of general Eurozone policy towards, at least, Greece.)

They are trying to 'reveal' that people oppose the stimulus in order to achieve structural reform  when this has never been hidden by anyone ('omg, look they practically admit it!') - this is a completely open agenda. It can be open because it has clear reasons for it that aren't political machinations.

So basically you are arguing that what was said it in the article is completely correct but doesn't matter but it doesn't fit into your "economic arguments" and "everyone knows that anyway". Yeah, whatever, and you wonder why I have grown to dislike your posts.

Also what Beet said.

Eh, no? I guess I was wrong when I thought you understood how bad the article was. It is not completely correct. This is similar to when right-wingers got upset over climategate - "look, they're admitting that they want to curb CO2 emissions! It's all part of the radical socialist agenda to end capitalism!"

That argument was correct in so far as it was true that climatologists want to curb CO2 emissions. It's wrong in the sense that it misses that they hold this belief for reasons other than pure ideology (which is not to say ideology does not play a part).

Anyone who doesn't even understand the economical argument for the position here (and worse doesn't even recognize that it exists) isn't really qualified to write about it, in my opinion. 

There are many reasons for the crises in different parts of the euro zone. I'm not getting into all of them right now. But most people would agree that the rigid labor market in Spain (which produced the highest unemployment in Western Europe even during the boom), the atrocious productivity levels in Portugal or the abysmal institutions in Greece contributed to the problems of these countries.

There is a concern that if Germany just bails them out all the time there will be no incentive to reform.

You can call me a moderate hero but I usually find that people who think the other side doesn't have an argument and is running some grand conspiracy to destroy the world out of pure spite  are usually, well, wrong. And even, may I say, a bit daft.

If you're not going to have the academic charity to try and understand the thought process and the reasoning behind a position different than yours the world will always seem very hard to understand. And it becomes easy to think that it is all some conspiracy of evil bankers.

[Simfan34]

I will post about it anyways.

The Communist Manifesto was a document of the moment, of a few years' zeitgeist. By the Crystal Palace Exhibition it was in deep crisis. By the time the improvement in living standards of the British working class began to be confirmed, the entire theory was discredited. And never would it have emerged from status as an obscure intellectual movement had it not been for one wrong turn in a little city called Sarajevo...

Great article, by the way. The Mandarins at the ECB know that they have short-circuited democracy and to them it is the greatest invention since sliced butter. They fully know what they are doing, to use their power to declare class war on European labor.

The great shortcoming of the "revolution", is that it was conceived as a solution for the particular problems of a particular time, the time being the capitalist age and the problems being the misery of the common man; those problems would continue indefinitely until the people moved to Socialism and eventually Communism. What Marx did not realize, however, was that he was not in the capitalist age, but its prologue, the end of the mercantilist age and the dawn of the capitalist one. Marx assumed that this period would be as far as man would go, but he was wrong. Instead it progressed onward, into the age of what I call "liberal democratic industrial capitalism", or Ldic. in the Ldic era we saw massive and simultaneous increases in both the wealth and political participation of the "proletarian"; this essentially made the Marxian revolution redundant. This period is almost neatly contained in the confines of the 20th century, with its height rather symmetrically around 1950 in the West.

By the time his theories had begun to gain currency, the Ldic age had almost begun in Western nations, which is why you don't see revolutions there. Indeed the revolutions was confined to states that had just begun the mercantilism age- Russia. One can even make the argument the sole revolution began in Russia and communism was spread politically from there. But that is irrelevant- what matters is that society had on its own managed to address the problems Marx identified without revolution. Reldago has said it in far more succinct terms- Marx's ideas have not aged well.

As I said before, the Ldic age is largely coterminous with the 20th century- and so it too is coming to an end. This, after all, is the postindustrial society! I still support industry, but any moves shall be medium term at best- automation shall reduce any labor left. I think we are now entering what could be called the "corporate creative capitalist culture" (let's call this 4C). Here we have and economy in which the innovator, producer, and manager are all being combined into singular role- a good example of this being Instagram. In such a society, the service society, there shall be first no need for a means of production or a person to specifically produce it, and then the "proletarian" shall not even be limited to drudgery but wholly unnecessary. This cannot be sustained, but Marxian revolution shall not answer it.

Cribbed from here: http://uselectionatlas.org/FORUM/index.php?topic=152935.msg3282604#msg3282604

[Beet]

Gustaf,

I think you are the one missing the point. Even if you concede that there is an economic case for structural reform, it does not follow that economists should have the right to do anything more than state their case. The ultimate decision should be left up to the political arena. Hence, the debate is really about politics.

The primary apology for the ECB is not that they want to prolong the crisis to force governments to enact structural reform. The primary apology has usually been (1) denials of how bad the crisis is. Go back and look at the official statements from the eurocrats since Spring of 2010... we have always been turning the corner, the worst has always been past, Greece has always been on the right track, and (2) claiming that it's not the ECB's 'role' to care about anything other than inflation, even when whole countries are slipping into recession or even depression. The quotes in the article do contain somewhat of a perspective from these eurocrats and their motivations that, if not exactly hidden, hasn't really been sufficiently questioned either.

As I thought you know I'm not a big fan of the ECB, nor of so-called technocratic rule. Sure, it doesn't follow that economists have the right to do anything more than state their case. Where am I claiming otherwise?

But technocratic rule is precisely what is being attacked; and specifically, a distinction is being drawn between "technocratic rule" as a buzzword used to the describe the fact that technocrats make many of the decisions in democracy, and "technocratic rule" as a conscious decision of said technocrats to directly reverse the verdict of democracy in favor of their own preferences, and to cause massive suffering to achieve that end. The latter being much more serious than the former.

You miss the point because this is not about economics. It's a seizure of power.

[Gustaf]

Gustaf,

I think you are the one missing the point. Even if you concede that there is an economic case for structural reform, it does not follow that economists should have the right to do anything more than state their case. The ultimate decision should be left up to the political arena. Hence, the debate is really about politics.

The primary apology for the ECB is not that they want to prolong the crisis to force governments to enact structural reform. The primary apology has usually been (1) denials of how bad the crisis is. Go back and look at the official statements from the eurocrats since Spring of 2010... we have always been turning the corner, the worst has always been past, Greece has always been on the right track, and (2) claiming that it's not the ECB's 'role' to care about anything other than inflation, even when whole countries are slipping into recession or even depression. The quotes in the article do contain somewhat of a perspective from these eurocrats and their motivations that, if not exactly hidden, hasn't really been sufficiently questioned either.

As I thought you know I'm not a big fan of the ECB, nor of so-called technocratic rule. Sure, it doesn't follow that economists have the right to do anything more than state their case. Where am I claiming otherwise?

But technocratic rule is precisely what is being attacked; and specifically, a distinction is being drawn between "technocratic rule" as a buzzword used to the describe the fact that technocrats make many of the decisions in democracy, and "technocratic rule" as a conscious decision of said technocrats to directly reverse the verdict of democracy in favor of their own preferences, and to cause massive suffering to achieve that end. The latter being much more serious than the former.

You miss the point because this is not about economics. It's a seizure of power.

I'm not sure what you're attacking here. There is a difference between the economic debate and the political debate. The dismantling of democracy in favour of technocratic rule has been going on for some time (well before the euro crisis) and is not directly linked to the debate on austerity.

[Beet]

I'm talking about the article here. The article is talking about the political side of things. It is not making an economic argument.

[The Mikado]

Teleology and Anglocentric normative models of "modernization" and "progress" ho!

[Gustaf]

I'm talking about the article here. The article is talking about the political side of things. It is not making an economic argument.

Ok, that's all fine and dandy but they're doing it in a way that is completely oblivious to the economic arguments. Which makes sense, since I suspect they don't know the first thing about it. Being ignorant doesn't preclude being right, but I prefer to read articles that are insightful (even if wrong) over ones that are clueless, regardless of whether I happen to agree with them or not.

[Beet]

So only economic analysis has insight, political analysis can not have insight? This seems to be apples and oranges. An article doesn't have to look at a question from every possible angle to be interesting, it only has to raise a new and significant point from at least one major angle.

[Gustaf]

So only economic analysis has insight, political analysis can not have insight? This seems to be apples and oranges. An article doesn't have to look at a question from every possible angle to be interesting, it only has to raise a new and significant point from at least one major angle.

No, that's not what I said either.

Look, they're presenting it as if the ECB wants to destroy the economy to achieve a purely political goal. They're ignoring that there is an economic goal to be achieved as well. I'm not saying they have to write in-depth about that aspect, but ignoring it completely makes them seem unaware of it.

When they say stuff like "He is certainly right that if the goal is resolving the crisis, or even price stability, then refusing further rate cuts is mighty strange. "

or

"But if you are someone who sees pay cuts as the goal, then it could be an argument for not quite yet."


It comes off as totally clueless. Or at the very least intellectually dishonest. Which is a shame, since the democratic problem with the ECB is quite real.

[Beet]

They're not arguing the ECB has a political goal, I think they accept that the goal is economic. "Pay cuts" is an economic goal. They are quite aware of it. The problem is not that the ECB has economic goals, but that its goals are in areas where the central bank shouldn't be meddling, and in order to achieve this, hey are deliberately forsaking their serious obligations.

Historically, a central bank has one purpose and one purpose only- to maintain financial stability, the means of which have been to act as a lender of last resort. Later in the 20th century, price stability and in the US full employment was tacked on. But no central bank worth its salt sits there while the entire economy collapses due to financial-sector stresses.

On the other hand, never have central banks been given the authority to set wages, determine labor policy, or decide when privatizations should happen. These decisions should be up to the political arena.

[Gustaf]

They're not arguing the ECB has a political goal, I think they accept that the goal is economic. "Pay cuts" is an economic goal. They are quite aware of it. The problem is not that the ECB has economic goals, but that its goals are in areas where the central bank shouldn't be meddling, and in order to achieve this, hey are deliberately forsaking their serious obligations.

Historically, a central bank has one purpose and one purpose only- to maintain financial stability, the means of which have been to act as a lender of last resort. Later in the 20th century, price stability and in the US full employment was tacked on. But no central bank worth its salt sits there while the entire economy collapses due to financial-sector stresses.

On the other hand, never have central banks been given the authority to set wages, determine labor policy, or decide when privatizations should happen. These decisions should be up to the political arena.

Their argument goes something like this:

1. The ECB (and austerity people in general) are deliberately destroying the economy with no economic gains.

2. This is strange and can only be explained as a grand conspiracy to abolish democracy in Europe.

3. That's not good.

I agree with 3. but it's silly to pretend that the rest of the analysis has any merit. They're ignoring the entire debate on the issue.

The euro is a bad construct which makes the solutions a bit less clear-cut.

[Politico]

The collapse of the Soviet Union proved him wrong.