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The DIMITRA plan and the financial and the political alchemies of G.Varoufakis

The DIMITRA plan and the financial

and political alchemies of G. Varoufakis

S.Mavroudeas * & Th. Chatzirafailidis **

*Professor of Political Economy, Department of Social Policy, Panteion University

** PhD candidate , Department of Economics, UoA

1. Verbal saviors in times of crisis

It is common, in times of crisis, the appearance of ‘saviors’ promising to suffering popular masses salvation through imaginative plans that will reform the system and improve their bad living standards. Behind the vociferous ‘anti -systemic’ cries of these ‘saviors’ hide more or less obvious compromises with the system. They mix radical with conservative notions, science with imagination and invent various ‘magical’ solutions that are unrealistic and, at the same time, do not offend the core of the capitalist system. They usually rally middle-bourgeois and petty-bourgeois strata who fear their proletarianization by capital but also tremble at clashing with it. At the same time they seek to dominate the working class and prevent it from moving towards more radical and left directions. If they succeed in this, then they redeem it with capital in exchange for avoiding their proletarianization.

A classic example from the history of Marxism is the clash of K.Marx and F.Engels with the anarcho-liberal palinades of P.Proudhon . Unsurprisingly, the latter proposed unrealistic scenarios for public banks and credit unions with zero interest rates. The issue of the financial system is almost always prominent in such big-mouthed pseudo-anti-systemic schemes. The strata of small entrepreneurship always fear and envy – especially in times of crisis – the privileged relationship and access of big capital to the financial system, which translates into their own weakness. That is why the denunciation of ‘bankers’ (along with convenient racist definitions) is almost always a basic tool of proto -fascist formations. At the same time, the exploitation of labor by capital remains unassailable since small entrepreneurship exploits labor* and in fact often more savagely than the big capital. On the other hand, the denunciation of the ‘bankers blends nicely also with the reform plan of Keynesianism, The latter calls for a constraint on financial rentiers for the benefit of the industrial capitalists. Of course, in this case as well, the exploitation of labor by capital remains unchallenged and a ‘human’ capitalism is simply sought.

G.Varoufakis and his personal political party is a typical example of a modern pseudo-anti-systemic savior. In fact, during the current election period, he managed to place himself at the center of the generally boring mainstream debate with his infamous DIMITRA project. In this, of course, he was helped by the systemic mass media themselves, who, while burying in silence the truly subversive political and economic views, took care to give him the best ‘negative’ advertisement.

The DIMITRA plan itself is a collection of proposals without any substantial coherence, an electoral firework to garner votes only. But, despite this, it is worth analyzing its political-economic dimensions for two reasons. Firstly, because they are rather repetitive axes of supposedly ‘radical’ ‘savior’ plans. And, secondly, because Marxists delve in depth even on the most ridiculous proposals in order to unmask them in front of the toiling masses. Their goal, of course, is not to participate in the mainstream debates where systemic charlatans trivialize every essential issue. The goal of Marxists is to generate a meaningful discussion with the ‘underworld’ of workers, intellectuals and youth who are thirsty for real answers to burning problems.

In this vein, this paper will analyze (a) the theoretical pillars of the Varoufakis’ proposals and (b) the practical dimension of the DIMITRA project.

2. Here the pea, there is the pea, where is the pea …

or the search for theory in Varoufakis’ shell game

Prima vista it is indeed difficult to identify a coherent analytical basis behind the various Varoufakian pronouncements. They are always publicity fireworks with small nuggets of scientific concepts which are usually sloppy. In general, a Keynesian perspective pervades all of them, which, however, is often mixed with very diverse arguments.

Regarding the DIMITRA project, an idea of any theoretical determinants is given by the Varoufakis’ article «Let the Banks Burn» first published on Project Syndicate. In this text, Varoufakis blamed regulators for the recent banking turmoil, in contrast to Keynesian views criticizing the deregulation of the financial system. In fact, he accuses them of ‘poisoning the money of the West’ (sic!). It is worth mentioning in passim that the most hardline Neoliberal views support something similar by demanding – as early as the 2007/8 crisis – that the banks be allowed to fail (that is to bankrupt).

Varoufakis begins his article by maintaining that today’s banking crisis is different from the one that took place in 2007/8 onwards. While the latter was a result of the greed of banks and rating agencies that profiteered and failed to comply with regulations, the former was due to the two-speed pro-banker government policy implemented from 2008 onwards, which on the one hand provided cheap money to bankers, while with the other hand it imposed harsh austerity on the rest of the economy. As a solution, he proposes to ‘shake up’ the current exploitative banking system and replace it with a healthy one, in which the Central Bank will have a dominant role.

Three main issues emerge from this analysis (?).

First, Varoufakis argues that the current turmoil in the financial system is a purely monetary phenomenon and has nothing to do with real accumulation. This is a frivolous point of view that is explicitly in line with the fallacious theory of financialization . The latter argues that there is now a new capitalism dominated by money capital, while the old one was dominated by industrial capital. In this new capitalism money capital does not only derive its profits through the redistribution of surplus value (which expropriates industrial capital from labour). But, additionally and more importantly, the money capital usuriously exploits society as a whole (that is, both labor and the other fractions of capital). Therefore, as a process of exploitation, the misappropriation of surplus value takes second place and the first role is assumed by usury. Based on this incorrect theory of financialization the main problem in the ‘new’ capitalism is not the exploitation of labor by capital but the exploitation of ‘us all’ (!!!) – according to Varoufakis’ recent fellow traveler C.Lapavitsa – from the financial system.

Second, in this analysis the ‘new’ capitalism consists of three classes (bankers, industrialists, workers) instead of two (capitalists, workers). This implicit class analysis coincides with Keynes’ latent class analysis and is of course dramatically removed from both Marxism and capitalist reality. For Keynes, capitalism is at risk from the strengthening of the bankers who do not make productive investments and moreover deprive industrialists of resources. The best the workers can do is to help the industrialists constrain the bankers. Only in this way can they hope for better wages. Characteristically, G.Varoufakis argues that the class of ‘creditors and banks’ tightens the noose around the neck of society as a whole.

Third, Varoufakis touches – en passant as usual – the question of the theory of interest. He argues that central banks with their policies have now made it impossible for a single nominal equilibrium interest rate to prevail that would ensure the balance between the demand and supply of money and prevent bank failures’.

The first two issues have already been addressed in a previous article («Destroying creative ambiguity so we can change the world» – BEFORE 8-4-2023 ). Below we will deal with the third issue (i.e. the theory of the interest rate) and we will show the analytical alchemies of Varoufakis .


Theories of interest

There are three main approaches in economic thought as far as the determination of the interest rate is concerned. First, we shall analyze the two and most important bourgeois theories of interest rate, and then we will separately present the relevant theory of Marx. As it will be argued below, this distinction is made not only for reasons of presentation, but most importantly for reasons of scientific substance.

The first bourgeois theory of interest is the Neoclassical Loanable Funds Theory (LFT). Its central idea spins around the existence of a natural rate of interest. This means that the market rate tends to approach the former in the long run. Thus, the burden of adjustment ‘falls’ on the market rate whenever savings diverge from investments. In more detail, when investments exceed savings and the market interest rate is lower than the natural, the former increases until it equals the latter, in order to bring the equalization of savings with investments. The inverse adjustment mechanism takes place when investment falls short of saving, so that in the end the economy always ends up in a state of equilibrium.

But what determines the natural rate of interest in LFT? Neoclassical economics define the rate of interest as the reward for abstaining from consumption and analyze it as a real variable. Simultaneously, in the neoclassical framework, interest rate is perceived as a rate of return, which does not differ in any way from the rest of the market rates. It follows that the natural interest rate is determined by the real forces of the economy and specifically by the neoclassical Marginal Efficiency of Capital (MEC). Additionally, the former is equated with the latter, according to the Neoclassical theory of perfect competition, in which all the rates of return in the market are assumed to be equal. Some versions of neoclassical economics argue that this equation is only achieved in the long run (Walras’ Law), while some more dogmatic versions of it argue that it takes place regardless of the time horizon (Say’s Law).

The second bourgeois theory of interest rate was formulated by Keynes, who defined the latter as the reward for individuals’ abstinence from liquidity (rather than consumption). Keynes claimed that the rate of interest is a monetary variable and not a real one, which is determined in the money market through the interaction of the supply of and the demand for money. Although there are various objections regarding the exogeneity of money in Keynesian theory, the prevailing opinion in literature up to this date, is that in the ‘Liquidity Preference Theory (LPT)’, money supply is exogenously determined by the Central Bank, whilst money demand depends positively on income and negatively on the nominal interest rate.

Therefore, in contrast to the neoclassical LFT, Keynes gave emphasis to the nominal rather than the real rate of interest. Although the ‘General Theory’ refers to the concept of the natural rate that is prevailing under conditions of full employment, Keynes underlined that the equilibrium between the supply of and the demand for money, is more likely to be the exception rather than the rule in the capitalist system and that it can be achieved only through active state intervention. In the Keynesian framework, this is relevant for all markets.

Hence, Keynes believed that free markets cannot guarantee the automatic equilibration of the MEC with the nominal interest rate. It is worth noting that one of Keynes’ most important arguments in the ‘General Theory’, was that it is the MEC that depends on the nominal rate of interest and not the other way around. Therefore, even if we accept that MEC is the Keynesian version of the rate of profit (something that we will discuss further below), Keynes reversed the neoclassical arrow of causality by placing the monetary sector at the starting point of his scheme rather than the real economy.

The third main theory of interest rate determination was developed by Marx in the third volume of Capital. One of the fundamental differences between Marxist Political Economy and Economics is that only the former uses the Labor Theory of Value (LTV) as its main analytical and theoretical tool. Although superficially the LTV seems to be concerned only with the determination of commodity prices in the sphere of production, the truth is that it is the basis upon which the Marxist monetary analysis is based as a whole.

In recent years there has been an intense debate among Marxist economists about the existence (or not) of a natural rate of interest in Marx’s analysis. On the one hand, Shaikh argues that the rate of interest is the price of production of the banking sector and that it is equated with the general rate of profit in a cross-industry level, while on the other hand, Fine claims that the concept of the natural rate of interest is nowhere to be found in the analysis of Marx and that the banking rate of profit tends to diverge from the general one, mainly due to certain peculiarities of the banking sector, such as its barriers of entry.

Although such a complex issue cannot be solved only in one paragraph, it seems that both approaches are right, although only partially. To begin with, Fine seems to be right about the following: in the Marxian analysis, the rate of interest depends solely on the supply of and the demand for Loanable Money Capital (LMC). Accordingly, since the LMC is not a commodity, it follows logically that the natural interest rate is not compatible with the Marxian Theory. However, this does not necessarily mean that the banking rate of profit is systematically diverging from the general profit rate. Especially if this is grounded on the banking’s sector barriers of entry, it is probably a weak argument, as it seems that similar (and perhaps even stronger) barriers of entry can be found in other sectors too. Primarily, it is problematic to set a natural price for an economic category that is determined purely by the forces of competition and not by the hours of socially necessary abstract labor.

Finally, Marx considered that the arrow of causality begins from the real economy and ends up with money, and not the other way around. In Marxist Political Economy, interest is a part of the total surplus value. The latter is created in the sphere of production. Hence, the upper limit of the rate of interest is given by the upper limit of the surplus value, namely, by the general rate of profit. Regarding its lowest point, and while theoretically it equals to zero, most of the times it is a positive number that depends on the power relations within the capitalist class and the institutional context.

The differences between Marxian and bourgeois theories of interest

The crucial difference between Marx’s analysis and the bourgeois theories of interest is that Marx did not accept the concept of the natural interest rate. Essentially, the only real disagreement between Keynes and the Neoclassical school of thought, is that while the latter perceives equilibrium as the natural state of the economy, the former claimed that it is only a possibility that rarely becomes a reality without an active government intervention, due to the inherent instability of markets. Thus, the concept of the natural rate of interest also exists in the ‘General Theory’, but it prevails only as an exception rather than the rule.

At first sight, Marx’s approach appears to have something in common with LFT, as both correctly identified that the arrow of causality begins in the real economy and ends up with money. However, at a closer look, one would spot the following difference between them: neoclassical money is a veil that functions simply as a medium of exchange. Thus, in the neoclassical scheme, monetary variables are passively adjusted to the real ones, without having the slightest effect on them. For Marx this was not the case, as money, especially since it functions as capital, cannot be neutral. Even though Marx recognized money’s certain degrees of freedom, at the same time he did not change his opinion about the primacy of the sphere of production within a capitalist economy. If someone omits that, he could easily fall into the theory of financialization.

However, the main discrepancy between the LFT and the Marxist theory of interest rate, is that in the former, the source of loanable capital derives from the economy’s stock of savings. On the contrary, Marx believed that loanable money capital consists of idle money that is consciously hoarded in the productive circuit by the capitalists (for various reasons), and it is channeled subsequently to the banks, or to the stock market. Whilst savings are expressing real wealth, idle money is just money stock that is not being used in the circuit of capital.

The essence behind this seemingly insignificant difference is that only Marx recognized that hoarding is one of the main functions of money. Additionally, he argued that it may be responsible for the mismatch between total sales and purchases and, as a result, for the breakdown of Say’s law. As opposed to that, neoclassical economics choose not to deal with hoarding. This makes perfect sense, considering that the neoclassical school (as well as Classical Political Economy) accepts Say’s Law, staying loyal to its dogmatic perception about the self-regulating markets. Obviously, hoarding as well as any other source of instability have no place in a theoretical scheme in which equilibrium is equally important as is the Koran for Muslims and the Bible for Christians.

Regarding the differences between Marx and Keynes, as it has already been stated, the latter believed that the arrow of causality starts from the monetary sector and ends up with the real economy. Furthermore, even if we accept that MEC is the most representative Keynesian indicator of profitability, it does not depend upon fundamentals, i.e., on the structural costs, the total surplus value and productivity (as the Marxian rate of profit argues), but it is based on the expectations about future demand. It is therefore a qualitatively different variable related to the Marxian rate of profit.

If we logically extend Keynes’ abovementioned argument, it will drive us to the conclusion that a capitalist economy could permanently operate in conditions of high profitability, as long as the regulatory authorities prevent the demand from falling through a low interest rate. This perception is problematic both theoretically and empirically. In the aspect of theory, it is problematic because if the solution was so obvious, the authorities would have already implemented it, in order to avoid the periodical and systematic crises of profitability. As far as the facts are concerned, it is equally problematic because in the recent crisis of 2007-08 the demand was quite high and so the basic problem was not there.

The argument that the monetary sector determines the rate of accumulation, although it reappeared in Keynes in a more disguised form, had already made its first appearance in Marx’s era. Specifically, Marx criticized this view in Capital and defined it as ‘The Fetichism of Money’. This idea has revived recently, this time as the theory of financialization. However, the injection of extra money in a fundamentally weak economy is untenable, as much as DEPON is for a patient who suffers from cerebral insufficiency. In the same way that DEPON cannot solve but simply shifts the patient’s problem, the money is not able to cure a structurally unhealthy economy. Even if the authorities would decrease the interest rate, or even if they would print a vast amount of money, the investments will not recover when the profitability of the system is low. Besides, the authorities had already tried both solutions and the results were not satisfying. The most recent example was the quantitative easing. In fact, a few months ago, Varoufakis – amidst his incredible palinades – was quick to characterize quantitative easing as the new progressive monetary policy par excellence (https://mera25.gr/gianis-varoufakis-mia-nomismatiki-politiki-pou-tha-anakoufize-tin-pleiopsifia-edo-kai-tora/ ). Today, he is actually denouncing it again as it is one of the basic elements of the policy ‘that poisoned the money of the West’.

Finally, in contrast to Keynes who argued that the interest rate is determined by the supply of and the demand for money, Marx claimed  that it is determined by the supply of and the demand for LMC. At this point, two completely different theories of money collide. Although both Marxist theory of money and LPT accept that banks manage and lend money, the money primarily functions as capital only for Marx. This is the reason why Marx perceived banks as authentic capitalist enterprises which are mainly involved in lending processes to make profits, while Keynes was unable to transcend the neoclassical view of banks as passive intermediaries that simply provide cash to individuals. Even the Keynesian demand for money for speculative reasons differs significantly from the Marxian function of money as capital.

The theory of interest in the article ‘Let the Banks Burn’

Since the necessary theoretical framework has been set, it is now possible to answer our initial question.

According to the analysis of the previous section, the view that an equilibrium interest rate exists in the money market has Keynesian origins. We recall here that for Keynes, the rate of interest is a monetary variable which is determined in the money market by the interaction of the supply of and the demand for liquidity. However, there is the following subtle difference: while Keynes believed that the disequilibrium in money market is almost the norm due to the inherent volatility of the system, in the article, today’s banking panic is due to the policies of governments and central banks after the 2007-08 crisis, i.e., some distortions of the well-functioning market. The same applies to the crisis of 2007-08, which is also presented as the result of a distortion, which simply differed in form.

The argument that crises are exogenous is restated a bit more elegantly later in the article. Specifically, Varoufakis states that the private banking system was designed to be unsafe and that it is inherently unable to comply with the otherwise ‘orderly markets’. So, while for Keynes (who is nowadays no longer considered as one of the most left-wing economists in the history of economic thought) the markets do not function properly, in the article, the problem are not the markets, but the institutions and in this matter, the banks. The explanation of an economic crisis with causes outside the system itself has always been one of the key features of neoclassical economic analysis.

The assumptions of equilibrium and efficiency in the money and capital markets and their implications for the equilibrium interest rate have been questioned even by the most eminent bourgeois economists. Two of the most influential works in this field were the papers of the Nobel Prize winners in economics J. Stiglitz and R. Shiller on Asymmetric Information and Volatility in Securities Prices that cannot be explained by Efficient Market Hypothesis (EFH). Therefore, the following question reasonably arises: at a time when even the leading theorists of the system are forced to admit that money market imbalances and banking crises are not mere distortions of the otherwise orderly markets, how leftist and radical is to claim the opposite?

If we go back to 2008 and suppose that post-crisis regulators would start to ‘tighten the reins’ on private banks instead of continually subsidizing and allowing them to implement their flimsy business models. Would this be enough to prevent what followed, as well as to maintain the equilibrium interest rate?

No one disputes that Central Banks have enough power to significantly influence the market interest rates, primarily through the determination of its base rate. However, this designation is not arbitrary. On the contrary, each Central Bank, as the regulator of the entire banking system, must conform to the changing conditions of the markets, because if it does not, this will put the private banks at risk. It is enough here to think what the effects on the economy and the banks would be if the Central Bank decided not to ‘cut’ cheap money to prevent a total collapse in crisis and correspondingly, if it did not raise interest rates in periods of high demand for loans and securities, in order to keep the size of financial ‘bubble’ within some relatively manageable limits.

Therefore, it seems that the Central Bank’s base rate depends on the supply of and the demand for loanable capital which, in turn, depends on the average profitability of the economy. For example, if the profit rate is low, this will cause a decrease in the demand for loans (these are mainly loans that finance productive investments) along with an increase in the supply of loanable capital, as an increasingly larger part of money will remain idle in the absence of profitable investment plans. Therefore, the idle money will flow into the banking system in search of higher returns. In such a condition, the Central Bank is obliged to reduce its base rate. The opposite will happen in periods of boom-high profitability.

Thus, although Central Banks have an important institutional role, they cannot completely control the movement of interest rates. Hence, the interest rates that prevailed after 2008, were not the result of the Central Bank’s special sympathy for private banks, but they were in fact shaped by the low profitability of the global economy. After all, if one looks at the empirical evidence, they will find that after every major crisis of the system (and not only after the crisis of 2007-08) interest rates follow a decreasing trend, and fragile banking models are deliberately created to restore investments.

Finally, the view that there is one and only interest rate in the markets is an oversimplification. In such an uncertain economic environment where asset yields, stock and derivative prices, credit ratings, loan and bond spreads are shifting almost every hour, the only constant is the change. Thus, the qualitatively different yields of the markets tend to diverge further and further. Besides, even Tobin, a laureate economist who could hardly be called a radical leftist had the same opinion, as he built an economic model with many financial assets and their corresponding returns.

2. The DIMITRA project or the wizard of Oz in new adventures

Based on his ‘well-versed’ theoretical analysis, Varoufakis proceeds to his main specialty: submitting policy proposals that move in the realm of science fiction. The DIMITRA project is his typical most recent. creation.

Always with ‘creative ambiguity’ (i.e. analytical chaos and political adventurism) it oscillates between (a) a public debt settlement system and (b) a digital PPP (public-private partnership) financial system.

The DIMITRA plan proposes the creation of a digital wallet (i.e., a deposit account) for everyone at the Central Bank. The latter will be something like a free bank account that will allow every citizen to save and transact at no cost (i.e., without the fees etc. of private banks).

To the extent that this system is limited to the settlement of debts, then automatic offsets can be made for transactions with the State. Two issues arise here. First, the automated offsetting of debts and payments with the State can be done simply by the Greek tax office with a better than its current pitiful system. But secondly, and most importantly, the Varoufakian science fiction transforms the Central Bank from a banker of the state into a commercial bank (as it takes deposits from the citizens). It is a fictional scheme under capitalism, similar to the Proudonian daydreams of a ‘public bank’. The Central Bank (whether privately or publicly owned) in capitalism has a balance sheet (i.e., costs and revenues) and also makes a profit. It deals with the transactions of the state (although in the last decades many of them have been relegated to the private banks) . Commercial banks (private or public) undertake all transactions between citizens. Essentially, however, they undertake – of course for a fee – to collect unused liquid assets and channel them into capitalist business activities. This ‘division of labor’ is fundamental to the functioning of the capitalist system. It cannot be undone because otherwise the third of the basic fractions of capital (productive, commercial, monetary) is effectively abolished. There is no capitalism without these three basic categories.

These contradictions and fictions can be seen even more clearly in the case of Varoufakis’ digital financial PPP. In this second case, citizens’ deposit accounts are in digital currency. Varoufakis mixes it inordinately – simply to spice it a bit – with cryptocurrency. This is incredible nonsense: digital currency is a government currency as opposed to cryptocurrencies which are private ‘currencies’ (i.e. tools of speculation and fraud). Indeed, many Central Banks are preparing digital currencies. But they do not intend to take deposits from the public, i.e., to put the commercial banks out of business. Instead, the Varoufakian science fiction proposes to do it so that with this ‘wallet’ of digital currencies in the Central Bank, citizens will be able to make transactions. Varoufakis falsely claims that this will have no cost. The Central Bank has costs and should have revenues to cover them. Furthermore, in the Varoufakian fiction, revenue is needed for the Central Bank to buy (and distribute for free!!!!) public goods. Where can this income come from? One possible solution is either from a fee or from the income gained by paying a lower interest rate than inflation (i.e., citizens paying a cost to guarantee deposits).

This is where the partnership with the private sector comes in. If citizens want higher yields, then they can go to private banks where, however, there will probably not be a guarantee of even a part of the deposits (as currently provided for commercial banks). Here Varoufakis sheds his Keynesian lion-coat and dons the tailcoat of the Austrian Neoliberal. Essentially, the private banks of his fiction are like investment banks (those that his Keynesian friends denounced as the main culprits of the 2007-08 crisis).

The first thing that one notices about this proposal is its limited radicalism, as it suggests the mere replacement of the current private and exploitative banking system by a new and fairer one, in which the private banks will continue their normal operation, while the Central Bank will have the first word. The article does not even dare to propose the complete nationalization of banks, even within the capitalist system; let alone their socialization under socialism. It is worth mentioning that even the idea of the dissolution of private banks is not entirely new and innovative. Its main supporters were the Austrian economists who, could be declared as radicals by no one.

More importantly, the above proposal misses the following point. In capitalism, banking is just another profitable business that, like all the others, aims at profit and does not care about the satisfaction of human needs. This is true whether we refer to the private banks or to the Central Bank. The purpose of the banking system is to reduce the various costs of the production circuit and to contribute to the expansion of accumulation, through the concentration and subsequently the conversion of a considerable part of money into money capital. For the useful services that banks provide to the system, they are (often generously) remunerated with a significant portion of the surplus value. In short, the banking system in capitalism facilitates and serves the expanded reproduction of capital in any of its forms.

As a natural consequence, since the Central Bank is the key player in such a system, it could not be significantly different from it. The central banks were created after the private banking, and as it is the case for the latter, they were not imposed by metaphysical forces outside the system, nor they were ‘invented’ out of nowhere by some geniuses, but they were a product of an economic necessity. This necessity lies in the vital importance of the existence of a big bank that centrally manages and controls the entire private banking system, ensuring its smooth functioning. The latter is inextricably linked to the maximization of banking profits.

In this context, the idea of using Central Bank’s revenues for the purposes of buying public goods ‘collapses’, even if the former could generate enough income from its activities. Besides, historical experience has already shown that not even the most egalitarian bourgeois state (let alone a capitalist Central Bank) has ever used its revenues exclusively for such purposes.

Suppose now that we omit all the above along with the use of the term ‘citizens’, with which the distinction of society into classes disappears and we assume that the economic regime which is proposed in the article would begin to apply in our economy starting from tomorrow. How exactly is the basic capital-labor opposition (rich and poor if someone prefers) expected to be resolved? Simply, the money which is stemming from the exploitation of the ‘poor’ and earned by the ‘rich’ would no longer be hoarded in private banks and would not change hands through the mediation of the latter, but it would be kept in the book accounts of a Central Bank and would circulate through its own mediation. Furthermore, if the costs of transactions would be reduced, the most likely to happen is that the mass of profits would be increased more than the income of the poor.

Moreover, as long as the ‘wealthy citizens’ can still choose what to do with their idle money, they would almost certainly look for alternative sources of profitable investments, even if that money is secured on some government ledgers. One of these sources could be the private banks. In any case, since the wealthy ‘citizens’ would have the opportunity to invest in private financial institutions and make a considerable gain, it is quite difficult (if not impossible) for them to choose hoarding instead and to remain satisfied with a near-zero rate of return. Thus, the private banks will rebuild themselves before they can even collapse.

The DIMITRA project is characterized by a contradiction of typical logic. While theoretically it is defined as a simple tool that will reduce the costs of transactions, when it comes to the field of practice, it introduces through the back door a mechanism of autonomous money creation at the national level. The latter is clearly seen in the following passage:

With DIMITRA, the State will be able, with the push of a few buttons, to credit the LPD accounts of specific social groups, e.g., disabled people, low pensioners, unemployed, etc., overcoming fiscal strangulation, and therefore recovering degrees of fiscal freedom.

So, through DIMITRA, money will not simply be transferred from one account to another without costs, but it will provide the right to Greece to exercise its own economic policy.

It is a well-known fact that the second option is unachievable (at least today), since as a member of the Eurozone, Greece does not have the slightest scope to exercise an independent fiscal or monetary policy. The European Central Bank is in complete control of the funds that are provided to Greece (which have been frozen for several years due to the memoranda signed by Varoufakis himself) and at the same time, it supervises Greece’s domestic private banking system through various regulatory rules.

Hence, if we acquire the right to print our own money, this will automatically cause our exit from the Eurozone. So, the following should be clarified. Does the text finally support the exit of Greece from the Eurozone or it is argued that Greece must stay inside the Euro system but with less transaction costs and simultaneously without having its own currency?

Varoufakis should finally make clear to the Greek people without any spins, and pseudo-scientific terminology if DIMITRA means an exit from the Eurozone or if it is simply a small modification to our domestic banking system which does not require the adoption of a national currency. It is not possible to support two theses that contradict each other.

In the second case (i.e., the creation of a payment system within the Eurozone) additional issues arise.

If we suppose that DIMITRA really is ‘an electronic platform for doing transactions instead of paying the banks. It is a trading platform, not a currency! We are not planning to leave the euro, but we are ready to legislate all that is needed to put society and the country back on its feet.’

Then, as long as Greece is still inside Eurozone, lending as well as deposit rates in its domestic banking system would be determined by EURIBOR just as it is happening today, which means that even if the Central Bank of Greece wanted to set an exogenous deposit rate by its own discretion (directly or indirectly), it would not be able to do so, unless the Eurozone allows it.

A little further on, a new, equally important contradiction arises in the article, which concerns the economic components of DIMITRA in the context of a national currency. The text states that:

‘DIMITRA ensures you tax exemptions that are equivalent to a higher interest rate than what your bank offers you.’

At the same time, in the article ‘Let the Banks Burn’, there is the following extract:

‘The central bank could also use modern digital cloud-based technology to provide free digital transactions and savings to all, with its net proceeds paying for essential public goods

If both proposals are true, this means that the central bank would collect its income from citizens’ deposits, allowing them to withdraw a significantly higher amount of money whenever they want. At the same time, the state would have considerable expenses, since it would buy public goods, in order to provide them to the people.

Without special knowledge of economics, one can easily understand that such a business model is not sustainable in the capitalist system, whether it is implemented by state-owned or private enterprises. To put it simply, imagine a company that raises capital solely from its shareholders, to whom it pays a sufficiently high dividend, without even doing business itself to support the spread between the total dividend and its initial placement of capital. It is obvious that such a business would shut down before it actually starts operating.

But let’s skip this contradiction and assume that the above model is economically viable. According to the text:

‘Thus, the partial transfer of money to DIMITRA will incentivize banks to reduce their fees, raise deposit rates and, in general, stop exploiting their small depositor customers.’

Namely, due to the more appealing rates of return of DIMITRA, the central bank will take the customers of private banks and gain a larger market share. Thus, private banks would be obliged to raise their deposit rates and lower their fees. In this way, however, the banking rate of profit will fall below the average profit rate of the economy.

However, as long as capitalistic competition exists, capital is constantly being transferred from industries with the lowest to those with the highest profitability, in search of greater returns. Thus, in this case, a massive disinvestment from the banking sector will take place. As a result, deposit rates will return (and indeed quite soon) to their initial level.

The bottom line is that in the free market, there is no sector that consistently extract a higher or lower rate of profit than the average. Although the state affects competition, the rule is that in the long run, the profit rates of all individual sectors are moving towards equality.

3. Conclusions

Most of the time, mainstream public debate is conducted with shouting, slogans, insults and appeals to emotion. In an environment full of politicians and careerists building names and fortunes at the expense of the people, scientific arguments and constructive disagreements are rare.

The main conclusion of the above text is that from a scientific point of view, the opinions expressed in the article Let the Banks Burn’, as well as the corresponding economic policy proposals, are a mixture of bourgeois-systemic theories, dominated by the New Keynesian concept (right-wing Keynesianism), but also with strong elements of both Neoclassical and Austrian economic thought, especially in individual points. The general spirit of the article is that orderly markets can exist in capitalism, as long as they are not hindered by various distortions, such as class-biased regulators, or greedy and corrupt private banks. To avoid these obstacles, it is proposed to create a so-called pro-people banking system with the backbone of the Central Bank, which will coexist harmoniously with private financial institutions.

In contrast to the above, we support the following: orderly markets with winners for both classes of society do not existed and never will. In the existing socio-economic system, banks will always be profit-driven capitalist enterprises, while the Central Bank will contribute to the achievement of their objectives. Therefore, the main dilemma is not to choose the optimal form of banking management within capitalism, but to choose whether there should be private ownership in banks or whether the latter should be under social control, which of course presupposes the revolutionary change of society.

But the latter is not a case concerning systemic ‘saviors’ like Varoufakis nor his politically hungry pseudo -leftist fellow travelers. This is a task for the working class and the revolutionar Left (that is, the only Left worth its name).




Stavros Mavroudeas on the IRIB (Iran’s national TV channel) discussing the European energy crisis and its human cost

IRIB (the iranian national TV channel) hosted a discussion about the human costs of the European energy crisis.

The lead was given by a recent ECONOMIST article arguying that the deaths caused (through cardiac and respiratory complications) by the lack of sufficient energy (caused by the skyrocketing of the energy prices) surpassed those caused by COVID-19.

Unsurprisingly, the ECONOMIST attributed the high cost of energy to Russia and the Ukraine conflict.

I argued that the ECONOMIST article was correct on one point, wrong on a second point and consciously hiding two other points.

ECONOMIST was correct in pointing out the big human cost of the European energy crisis. His statistical calculations (how to measure deaths caused by COVID-19 and those by energy poverty) are not unambiguous. However, it is an undisputable fact that the skyrocketing of energy prices has a huge human cost; both in deaths and in deteriorating living standards and energy poverty of the popular classes.

ECONOMIST was wrong in putting the blame unequivocally on the Ukrainian conflict. Energy prices have started hiking at least 6 months before the beginning of the Ukrainian conflict.

ECONOMIST consciously hides the two main reasons behind the skyrocketing of energy prices.

The first reason is the European energy exchange; a speculative mechanism instituted by the European Union. This mechanism boosts the profits of the big energy companies (at the detriment of consumers) but also exacerbates volatility and instability during
crises and geopolitical conflicts.

The second reason that ECONOMIST consciously concealed is that European energy prices were increased further because of EU’s subservience to the US. The EU not only decoupled abruptly from its traditional supply from Russia, but also turned towards the extremely costly LNG (liquid natural gas).

The profitable for energy capitalists turn towards renewable energy sources – masqueraded as Green capitalism – augmented the problem as these sources are expensive, unreliable and not eco-friendly also.

The video recording of the discussion (mostly in Farsi unfortunately) follows.

Destroy ‘creative ambiguity’ in order to change the world – Against Varoufakis’ conformist sci-fi

Destroy ‘creative ambiguity’ in order to change the world

Stavros Mavroudeas

Professor of Political Economy

Panteion University

In a recent (much publicized by systemic circles) article, G. Varoufakis, referring to the current international banking turmoil, uttered the supposedly radical slogan ‘let the banks burn’. Of course, G. Varoufakis is not famous for the coherence of his economic analyses. As he has described himself, he is a fairy tale creator impersonating an economist. This article fully falls within this rule.

Moreover, Varoufakis’ political views vary – many times simultaneously – from radical (but never really left-wing) to blatantly conservative. Recently, for purely opportunistic electoral reasons, he professes a ‘left’ turn. In his recent masquerade he found only a few willing and equally opportunist accomplices but their electoral success is still hanging in the balance. Of course, as in his scientific analyses, ‘creative ambiguity’ (which is synonymous with opportunism and unreliability) is the hallmark of his supposedly radical political turn.

What exactly does G. Varoufakis propose with his call for letting the banks to burn?

It is a bit complicated (but not difficult) to trace his theoretical perspective. Putting aside an older bogus self-description that he is an ‘erratic Marxist’ (as he is too erratic to be a Marxist), he once again proves himself to be a superficial Keynesian. He blends this perspective with the erroneous theory of financialization (that is the thesis that today there is a new capitalism dominated by bankers who usuriously exploit both workers and entrepreneurs). Characteristically, in a solitary class reference, G. Varoufakis argues that the class of ‘creditors and banks’ tightens the noose around the neck of society as a whole.

He then attributes the contemporary financial problems to government policy that ‘poisoned the money of the West»’ by (a) not having a single’», i.e., fail). It does not take deep political-economic knowledge to know that, at the level of economic policy, there has never been a single nominal interest rate but that states conduct monetary policy by intervening in interest rates. At the level of general theory, it would be interesting if G. Varoufakis clarified how – in his opinion – is determined a market-clearing interest rate in capitalism. Is it a purely monetary quantity equating the money supply with the peculiar Keynesian demand for money (which depends on the psychologically determined demand for liquidity)? Is it a natural rate of interest as the Neoclassicals claim? Or is it the balance between the demand for and the supply of loanable capital, but limited by the rate of profit, as Marxism asserts? But these questions are fine print for G. Varoufakis.

On more practical matters, Varoufakis’ view that the banks should be allowed to go bankrupt is something hardly novel. The dogmatically Neoliberal Hayekians are constantly voicing it.

Subsequently, G. Varoufakis indulges as usual in science fiction projects. He proposes closing down private banks (?) and creating (a) a digital currency by the Central Bank (obviously, in the european case, the ECB as for Varoufakis exiting the euro is a disaster and only realistic European disobedience saves!!!) and (b) a digital wallet based on blockchain technology (not to forget his earlier involvement with the dirty world of cryptocurrencies). Citizens will keep full-guaranteed deposits there. If they want to have a return on their deposits, then they could – assuming the risk of bankruptcy – place them in investment banks (?). Such a banking system is capable of ‘complying with the rules of an orderly market’ (as Varoufakean radicalism can only go so far).

He ignores of course that the financial system in capitalism exists to channel capital to capitalists and not to serve small depositors. And that money capital does not do this mediation for free.

But even if the Central Bank undertakes the collection of funds, it does not do so for free either. Where will it make profits to buy public goods (as Varoufakis benevolently but obscurely suggests)? If it gives a lower interest rate (as a risk premium) and/or imposes a higher seigniorage then it will exploit the depositors.

Varoufakis’ subsequent heated argument with the more Neoliberal cryptonomists about ‘big brother’ and the proposal for a legacy monetary oversight committee is unworthy of serious discussion.

The epilogue of Varoufakis’ article is revealing: he equates miners with bankers as harmful recipients of subsidies from society. Excellent class perspective indeed!!

But the most essential problem of Varoufakis’ science fiction is the ignorance (?) of the relationship of the financial system with production and real accumulation. In the financialisationist high clouded cuckoo land, the interest rate is pure usury that has nothing to do with the rate of profit.

On the contrary, Marxism aptly shows that interest is part of the surplus-value created by the workers, appropriated by the industrial capitalists, and redistributed among the latter and the money capitalists. Today’s financial turmoil is due to the inability to increase profitability which, in turn, limits the income of the financial system and leads to the collapse of the capitalist structure of debt and fictitious capital. Capitalism responds to this problem by supporting strategically important capital (as the big banks) and increasing the exploitation of labor.

For the labour movement and the real Left this is the main front and not the search for utopian banking reforms that only cause confusion and misdirection. Against the ‘creative ambiguity’ of the fellow-travelers of bourgeois politics, the transitional program of the real Left gives clear and adequate answers.

The Greek Saga – S.Mavroudeas, New York University, 24/3/2023 video

Video recording of the talk on The Greek Saga: Competing Explanations of the Greek Crisis

by Stavros Mavroudeas at NYU (24/3/2023:

The Greek Saga: Competing Explanations of the Greek Crisis – S.Mavroudeas, New York University, 24/3/2023

The Greek Saga: Competing Explanations of the Greek Crisis
A Lecture by Professor Stavros Mavroudeas
Friday, March 24, 10:00-11:15 am EST

This is the third speaker event of a three-part series on Political Economy. Professor Mavroudeas, is a renowned economist in the field of Political Economy. Despite the fact that the Greek economic crisis happened more than ten years ago, it is as relevant today as it was then because it shows that market economies are prone to breakdowns. Why did it happen? What brought about the crisis? Professor Mavroudeas will answer these questions from different perspectives and examine the role of EU policies in the aftermath of the crisis. Professor Mavroudeas will end his presentation with an overview of the evolution of the Greek economy after the 2010 crisis. Could such a crisis be avoided in the future? Could it happen in the U.S.? Join us to discuss these questions and many more.

Dr. Stavros Mavroudeas is a Professor of Political Economy at the Department of Social Policy of Panteion University, Athens, Greece. He received his Ph.D. from Birkbeck College, University of London. His teaching and research are in the field of Political Economy, Macroeconomics, History of Economic Thought, Labor Economics, Economic Growth and Development Economics, and the Greek Economy. Dr. Mavroudeas is the author of numerous papers and books in English and Greek. The Limits of Regulation (Edward Elgar, 2012) and Greek Capitalism in Crisis (Routledge, 2014) are examples of his prolific work.

Bank failures: The specter of crisis once again looms over capitalist economies

Bank failures: The specter of crisis once again looms over capitalist economies

S. Mavroudeas

Department of Social Policy

Panteion University


On 10/3, California-based Silicon Valley Bank (SVB) became the largest bank to fail since the financial crisis of 2008. It was the 16th largest US commercial bank. It specialized in transactions with technology and healthcare companies and particularly in investments in start-up companies.

SVB’s bankruptcy was triggered by significant losses on corporate securities it had lent to. In order to diminish losses SVB bought US state debt titles. However, Fed’s policy of raising interest rates diminished the market value of these titles. SVB was then in a conundrum. It tried to cover losses with an equity raise, but that caused panic among the major California tech companies that kept their cash in SVB. The result was that instead of raising capital, SVB faced a typical bank run. Its stock collapsed, dragging that of other banks down with it. Trading in its stock was halted and efforts to raise capital or find a buyer failed, leading to the US Federal Deposit Insurance Corporation (FDIC) taking control of it. The latter is an independent government agency that insures bank deposits and supervises financial institutions. It will liquidate the bank’s assets to repay its customers, including depositors and creditors.

The SVB bankruptcy is not an isolated incident. It was preceded by another crack in the financial system in the sinful sector of cryptocurrencies. Cryptocurrency bank Silvergate went bankrupt after prices and trading of bitcoin and other cryptocurrencies collapsed (8/3/2023). In addition, the collapse of SVB was quickly followed (12/3/2023) by the closure of Signature Bank, a lender to the cryptocurrency sector. During the following days a number of other financial institutions came to the fore as ‘toxic’ (i.e. in danger of going under); the Credit Suisse being the more prominent of them. In all cases there was concerted efforts to devise plans to solve them.The crucial point in all these cases is not that salvation plans were devised but the high frequency of bankruptcies or near-bankruptcies in a limited time-period. Another crucial point is that the specific mechanisms of each case differ: from start-up financing (in the case of the SVB) to the cryptocurrencies (in the case of Silvergate) and to the more traditional causes (in the case of Credit Suisse). All these point towards a general malaise and not to isolated specific cases (as some Mainstream commentators tried to argue initially).


These events have caused fears in all the main political-economic decision centers of the capitalist system about triggering a chain (domino) of bankruptcies. Their reactions, as usual, are a combination of ostrich and alertness.

The EU and the UK were quick to say they were little affected by the events. At the same time, however, the English branch of SVB is literally being sold for peanuts.

On the contrary, the USA activated a series of available tools (overt and covert) to neutralise the danger of the domino. In addition to reassuring statements and influencing public sentiment, the Treasury Department, the FDIC and the Fed announced a new Bank Financing Program (BTFP), which offers loans of up to one year to institutional institutions against bonds and certain other collateral. Collateral will be taken at face value rather than market prices, avoiding forced sales in response to the fear of bankruptcy. In addition, the deposits of the two insolvent banks (including those above the institutional limit of USD 250,000) were guaranteed. Also, regulators are mussing over the introduction of new tests and requirements for bank solvency.

These moves aim to avoid panic in the international money and capital markets in the aftermath of the bankruptcies. A general panic would cause an uncontrolled avalanche and possibly a crash. Capitalist decision-making centers have enough experience – if conditions and time permit – to avoid such avalanches. But what they fail to achieve is to resolve the deeper contradictions of the system that give birth to them.


Within Mainstream Economics and the ruling classes’ decision centres the bankruptcies fomented already raging controversies. Two are the main focal points of these controversies. First, social-liberal views blame Trump’s deregulation of the financial system (the withdrawal of the Dodd-Frank Act in 2018), which loosened supervision over banks. They maintain that with more financial regulation bankruptcies would be avoided. Second, proponents of looser monetary policy (supported by private markets that are panicking) argue that rapid interest rate hikes stifle business and demand a pose.

These are myopic quarrels that turn a blind eye to the insurmountable fundamental contradictions of capitalism. Marxist Political Economy aptly places at the core of these capitalist problems the long-term falling profitability trend that haunts the very DNA of capitalism. This position is again confirmed in today’s bankruptcies. Contrary to the frivolous financialization theories, the financial system has never cut its umbilical cord with capitalist profitability. Interest (financial sector’s revenues) are part of surplus-value (and hence a deduction from enterprises’ profit). Hence, once again – contrary to the ‘financialisationist’ naïvetés – the falling profitability causes financial bankruptcies. Interestingly, in the current situation takes the form of a very dangerous duo: falling profits and falling business asset prices due to rising interest rates. This configuration increases vertically the danger of an impending recession.

The beginning of the 21st century is already marred by the increasing occurrence of capitalist crises. After the 2008 crisis (with its double dip), the COVID-19 health-cum-economic crisis followed. Both were associated with a serious decline of capitalist profitability. After the pandemic crisis, profitability recovered quickly once the economy restarted. But the recovery did not fully cover the losses of the crisis. Moreover, it quickly stumbled again upon the overaccumulation of capital (i.e. the existence of a big proportion of non-viable under current conditions capitalist firms). This was aggravated by the specific contours of the contemporary eruption of inflation that increased production costs. Thus, even Mainstream entities (e.g. JP Morgan) estimate that profitability is back on the decline.

As mentioned above, inflation further complicates the situation. Anemic capitalist growth produced real (and not merely monetary) causes for price increases. These were exacerbated by the systematic increase in corporate profit margins through mild price increases (i.e. profit inflation). But this trick quickly became uncontrollable, due to the intensifying imperialist conflicts and the inability to further increase the exploitation of labor. The former fragment production chains and increase costs.

The increase of the ‘zombie companies’ (firms which cannot cover debt servicing costs from current profits over an extended period) is an indicative sign of this situation. Contrary to previous Mainstream assertions (e.g. https://www.federalreserve.gov/econres/notes/feds-notes/us-zombie-firms-how-many-and-how-consequential-20210730.html ) this cohort is on the rise. What is also worrying is the fact that – contrary to Mainstream beliefs – these ‘zombie companies’ do not disappear quickly but rather manage to survive despite their precarious condition. The prevalence of ‘zombie companies’ has ratcheted up after the 1974-5 global crisis. What made them more long-lived during the last years is the persistence on low interest rates. The unconventional monetary policy (i.e., quantitative easing (QE)), gave further lease of life to these companies which would otherwise have been long buried. The current bout of inflation puts their existence at risk as central banks raise interest rates.

Capital faces further complications in the current situation. The emergence of a tight labour market (at least for several sectors of the economy) implies that capital cannot easily reinvigorate the increase of labour exploitation (the rate of surplus-value) as a counter-acting force in the decline of the profit rate. The ‘great resignation’ (fewer people working, that is a smaller workforce) and the ‘quiet quitting’ (meaning workers seeking fewer hours of work) means that – under the current conditions of work and pay – capital cannot easily employ methods of relative and absolute surplus-value extraction. This condition is expressed in the chronically low productivity.


Thus, the system faces the duet of low profitability and high inflation.

It seems that – at least currently – the main capitalist political-economic decision centres prioritise the fight against inflation. Hence, they increase interest rates. But this further worsens the profitability of enterprises. In such a situation the financial sector is much more vulnerable. It depends on the profitability of productive enterprises, which is falling. It is over-extended due to years of expansive fictitious capital operations (which depend upon credit expansion). At the same time, its assets are depreciated due to rising interest rates. Additionally, perverse phenomena appear; like the inverted yield curve (an unusual state in which longer-term debt instruments have a lower yield than short-term ones). This combination leads the most exposed banks to bankruptcy.

Probably capitalist political-economic decision centres expect that the rhythm of bankruptcies will be low and spread over time. Hence, they could face each one separately and without them resulting in a domino.

However, history has shown that capitalism is not an easily controlled system even by its most experienced managers. The current bout of financial bankruptcies is only the tip of the iceberg. The deep structural contradictions of the capitalist system – expressed fundamentally in the falling profitability – lay beneath the surface. And the capitalist system seems increasingly incapable of resolving them.

15th WAPE panel: ‘A critical review of the Financialisation Hypothesis’ – video

Following below is the video recording of the PANEL 8. ‘Capitalist Accumulation and the Financialisation Hypothesis: a Critical Review‘, that took place during the 15th WAPE Forum.

The chair and discussant of the panel was Lefteris Tsoulfidis (Professor of History of Economic Thought, Department of Economics, University of Macedonia, Thessaloniki, Greece).

The panelists were:

  1. Stavros Mavroudeas (Vice Chair of the World Association for Political Economy, Professor of Political Economy, Department of Social Policy, Panteion University,  Greece) & Turan Subasat (Professor of Economics, Department of Economics, Mugla Sitki Kocman University, Turkey) presenting ‘The Financialization Hypothesis: A Theoretical and Empirical Critique
  2. Michael Roberts (Independent Marxist Economist, UK) presenting ‘The Great Recession: a Marx, not a Minsky moment
  3. Ricardo Gómez Uribe (Universidad Nacional Autónoma de México(UNAM), Mexico) presenting ‘Store of Value and Means of Circulation: an Old Contradiction with New Expression’

The link for the video recording of the panel is the following: https://youtu.be/iqPhjoLmD0A

La pandémie et ses conséquences sur l’économie et le travail – entretien avec Stavros Mavroudeas

Le site francais Alternative Révolutionnaire Communiste (tendance de NPA) a traduit et publié en français l’interview suivante de l’économiste marxiste grec Stavros Mavroudeas sur la pandémie de COVID-19 et ses conséquences sur l’économie et le travail.https://alt-rev-com.fr/2021/09/01/la-pandemie-et-ses-consequences-sur-leconomie-et-le-travail-entretien-avec-stavros-mavroudeas/

La pandémie et ses conséquences sur l’économie et le travail – entretien avec Stavros Mavroudeas.

Colin Dresdner , Stavros Mavroudeas 1 septembre 2021

Le site italien Bollettino Culturale a publié l’interview suivante de l’économiste marxiste grec Stavros Mavroudeas sur la pandémie de COVID-19 et ses conséquences sur l’économie et le travail, que nous retraduisons ici en français.

Publié initialement sur Bolletino Culturale , traduit en français par Colin Dresdner

  1. Comment jugez-vous la gestion de la pandémie dans l’Union européenne ?

J’ai soutenu ailleurs1 que la pandémie de COVID-19 est une double crise. La crise économique couvait déjà (parce que le capitalisme n’a pas réussi à dévaloriser suffisamment les capitaux après la crise de 2008) et le coronavirus a déclenché et aggravé cette crise.

La réponse de l’UE a été similaire à celle des États-Unis, mais avec une différence marquée dans la “puissance de feu” politique. Comme après la crise de 2008, les États-Unis et l’UE se sont lancés dans des politiques sociales-libérales (donc non néolibérales) dictées par le nouveau consensus macroéconomique keynésien désormais dominant. Ces politiques comportent des mesures typiquement keynésiennes : une politique budgétaire expansive et une politique monétaire accommodante. Elles impliquent également une insulte au néolibéralisme : une politique industrielle discrétionnaire. Cependant, et contrairement à ce que pense une certaine “gauche” myope et réformiste antilibérale, ces politiques sont néoconservatrices et ne sont pas en faveur du travail et de la classe ouvrière. Bien qu’elles s’en écartent radicalement en utilisant activement la dépense publique pour soutenir la rentabilité capitaliste, elles partagent avec le néolibéralisme le fait de faire peser le fardeau sur les travailleurs.

Comme je l’ai déjà dit, l’UE a suivi cette voie. Mais les “munitions” utilisées (c’est-à-dire l’expansion fiscale et monétaire) sont nettement inférieures à celles utilisées par les États-Unis. Cela découle de deux facteurs :

– L’Allemagne (et le bloc “prudent” qui l’entoure) ne veut pas trop étendre ces mesures, car elle supporte la charge principale de leur financement.

– Les États-Unis ont une plus grande marge de manœuvre en raison du rôle dominant du dollar en tant que principale monnaie de réserve mondiale.

  1. Pensez-vous que l’argent du plan de relance « NextGenerationEu » (NGEU) un changement radical potentiel dans les politiques économiques européennes ou l’urgence sera-t-elle utilisée pour une transition vers un modèle de société pire que le modèle pré-covid ?

Comme je l’ai déjà dit, ces politiques néoconservatrices sociales-libérales n’amélioreront pas la situation des travailleurs. Le NGEU est un outil de restructuration des capitalismes européens face aux antagonismes américains et chinois. Ses priorités favorisent des intérêts sectoriels spécifiques (largement dictés par les principaux conglomérats de l’UE) et suivent une stratégie industrielle visant à renforcer leur position vis-à-vis de leurs homologues américains et chinois.

Le NGEU obéit à la directive visant à créer des “champions européens” (c’est-à-dire de grands conglomérats multinationaux européens capables de faire face aux concurrents américains et chinois). Par conséquent, il entraînera une concentration et une centralisation accrues du capital (c’est-à-dire l’oligopolisation et la monopolisation). Cela frappera durement les capitalismes périphériques et méditerranéens qui sont caractérisés par une énorme couche d’entreprises de taille moyenne. En ce qui concerne le travail, il n’y a aucun engagement à augmenter les salaires. Au contraire, la reprise planifiée est basée sur le maintien de coûts salariaux bas. Bien sûr, le capitalisme peut faire des plans, mais il est aussi traversé par des contradictions. Ainsi, en raison de cette violente restructuration capitaliste, il apparaît aujourd’hui – du moins en ce qui concerne la main-d’œuvre spécialisée – un manque d’offre de travail qui se traduit par une augmentation des salaires dans ces secteurs.

  1. Pour l’avenir post-pandémie, pensez-vous que le Green New Deal est une stratégie à soutenir ? Ces derniers mois, il y a eu de nombreuses discussions au sein des syndicats en Italie sur l’utilisation de ce type de politiques économiques pour créer des emplois bien rémunérés pour les diplômés, pour favoriser une situation de plein emploi à associer à des politiques de “garantie d’emploi”. Qu’en pensez-vous ?

Le Green New Deal fait partie intégrante de ces restructurations capitalistes sociales-libérales néoconservatrices. Il a été présenté comme le New Deal keynésien de notre époque. Et la majorité myope et réformiste de la “gauche” occidentale s’est immédiatement jetée dessus et a agi comme les meilleurs publicitaires du capitalisme. Le Green New Deal est en grande partie une stratégie industrielle crypto-protectionniste qui vise à soutenir les capitaux occidentaux contre le défi de la Chine et des marchés émergents.

Il n’est vert que de nom, car il oscille entre (a) repousser les concurrents (dont les références écologiques sont moins bonnes) et (b) ne pas nuire aux intérêts particuliers des capitaux occidentaux (en imposant des restrictions écologiques trop sévères). Les récents tiraillements réglementaires concernant l’énergie et le transport maritime en sont des exemples.

Il n’envisage pas d’augmenter les salaires. C’est un fantasme de la majorité de la “gauche” occidentale réformiste. Au contraire, en raison de la restructuration capitaliste qu’elle implique, de nombreux emplois seront perdus. En Grèce, il y a un exemple typique avec l’arrêt brutal des usines d’électricité au lignite. Cela a augmenté les coûts de l’énergie électrique pour l’économie grecque (qui se répercutent sur les factures des consommateurs et augmentent la pauvreté énergétique) et dévaste les régions productrices de lignite (provoquant une augmentation du chômage et de la pauvreté). Bien sûr, d’un autre côté, cela favorise des intérêts entrepreneuriaux spécifiques ayant une énorme influence sur les gouvernements grecs (SYRIZA inclus).

Il n’y a pas de plein emploi ni d’augmentation des salaires dans le conte de fées du Green New Deal. Les syndicats qui jouent ce jeu ne sont que des pions du capital. Si l’on jette un coup d’œil à la littérature environnementale dominante, on découvre que l’un des faits stylisés est que l’existence des syndicats est anti-environnementale car ils favorisent les salaires au détriment des politiques vertes. La conclusion est que ces deux éléments sont contradictoires.

  1. La pandémie a démontré les lacunes de la protection sociale en Europe en raison des politiques d’austérité des dernières décennies. Pensez-vous que cette expérience puisse être utilisée pour réformer l’aide sociale dans le bon sens ? Certaines organisations communistes ont proposé un revenu de base universel pour résoudre les problèmes liés au manque de revenus créé par le verrouillage. Pensez-vous qu’il s’agisse d’une solution viable et permettant de résoudre le problème du chômage en Europe ou plutôt qu’elle représente une résignation face aux taux de chômage élevés dans nos pays ?

A court et à moyen terme, il y a une augmentation du financement du secteur de la santé publique car c’est le seul capable de faire face à la pandémie. Cependant, les domaines les plus rentables (vaccins, médicaments, etc.) ont été réservés au secteur privé et subventionnés par l’argent public. Je m’attends, une fois que la pandémie se sera calmée, à ce que l’on revienne au moins en partie sur l’expansion du secteur de la santé publique et que l’on redonne de la vigueur à la part du secteur privé de la santé.

En ce qui concerne le système de protection sociale en général, le social-libéralisme n’est pas mieux que le néolibéralisme. Le social-libéralisme veut également réduire les dépenses publiques, en particulier dans les économies occidentales vieillissantes. Cependant, il est plus intelligent que le néolibéralisme et comprend que le secteur public doit être l’épine dorsale du système et supporter les principaux coûts. De même, une réglementation stricte par l’État ou les organismes paraétatiques (comme les fameuses autorités de surveillance indépendantes) est nécessaire, faute de quoi les capitaux privés feront des ravages.

Je suis en total désaccord avec l’idée du revenu de base universel. Il s’agit d’une proposition néoconservatrice lancée initialement par M. Friedman. Elle est envisagée par les sociaux-libéraux et les néolibéraux comme un faible filet de sécurité pour prévenir les bouleversements sociaux et les révolutions. Elle aura également un effet dissuasif sur les luttes pour l’augmentation des salaires. Cela rappelle la politique de l’empire romain du “pain et des jeux ” afin de maintenir le prolétariat romain sous contrôle.

  1. La journée de travail en Grèce a récemment été portée à dix heures. Pouvez-vous nous expliquer quel plan de restructuration du capitalisme grec se cache derrière ce choix politique ?

Cela fait partie intégrante des politiques néoconservatrices de flexibilité du travail (que la majorité de la “gauche” occidentale, myope et réformiste, a épousé et vanté). Elle allongera le temps de travail effectif au prix d’un chômage croissant. Elle augmentera également le taux de plus-value (c’est-à-dire l’exploitation du travail) puisque les heures supplémentaires sont pratiquement abolies (qui étaient mieux payées) et que le temps de travail supplémentaire n’est pas payé mais récompensé par des vacances supplémentaires (!!!). Le plan du capitalisme grec est de supprimer davantage de coûts salariaux.

  1. En Italie, on discute ces jours-ci de la fin de l’interdiction des licenciements. Les syndicats se sont opposés à l’idée d’une fin sélective de cette mesure en fonction de la situation de chaque secteur individuel, proposant une réforme des filets de sécurité sociale. Y a-t-il des discussions similaires en Grèce ?

Le gouvernement déclare généralement que le budget public est épuisé et que, lorsque la pandémie aura reculé, ces mesures de protection de l’emploi seront supprimées. En Grèce, les entreprises qui ont reçu des subventions et des aides pour lutter contre la pandémie sont tenues de ne pas licencier leurs employés. En revanche, leurs travailleurs, une fois mis en suspension d’emploi (c’est-à-dire qu’ils travaillaient moins) n’étaient payés qu’une fraction de leur salaire normal. Aujourd’hui, de nombreux porte-parole des entrepreneurs (en particulier ceux du secteur du tourisme, scandaleusement désinhibé) affirment que ces programmes de protection de l’emploi sont désastreux car les travailleurs préfèrent bénéficier de ces subventions plutôt que de travailler pour des salaires de misère dans d’autres endroits que leur lieu de résidence.

Il existe une autre complication. Ces régimes d’emploi ont facilité les astuces statistiques avec le taux de chômage et l’ont ainsi maintenu artificiellement bas. C’est nécessaire pour le gouvernement de droite de la Nouvelle Démocratie, qui tente de mettre en place un plan de double élection, probablement à l’automne (en misant sur les piètres résultats de SYRIZA). Une augmentation du chômage n’est pas bonne pour cette stratégie électorale. C’est pourquoi le gouvernement hésite pour l’instant à supprimer ces régimes de protection de l’emploi. Mais à terme, élections ou pas, il les supprimera.

Les syndicats officiels (GSEE, etc.) en Grèce sont principalement les laquais du gouvernement et du capital. Aucune discussion sérieuse n’a donc lieu sur ces questions et le public n’y prête de toute façon pas attention.

  1. Dans cette phase de reprise économique, les entrepreneurs italiens critiquent le revenu de base des citoyens (une forme de « workfare »2 qui ne fonctionne toujours pas). Les jeunes préfèrent recevoir ce revenu plutôt que des salaires très bas pour de nombreuses heures de travail dans le secteur du tourisme ou de la restauration. Au lieu d’augmenter les salaires, ils demandent l’annulation du revenu de base des citoyens. Cette histoire rend flagrant un problème: de nombreux travailleurs sont pauvres alors qu’ils travaillent, à cause de salaires très bas. A mon avis, c’est un problème lié au système de production italien spécialisé dans les produits à faible valeur ajoutée. Par conséquent, de nombreuses entreprises peuvent rester sur le marché soit avec l’argent public, soit en baissant les salaires et en annulant les droits des travailleurs. Ces problèmes seront-ils exacerbés par les conséquences de la pandémie ? Comment une force politique qui défend les travailleurs devrait-elle intervenir sur ces problèmes ?

J’ai déjà répondu à cette question dans des questions précédentes. Permettez-moi de systématiser mon point de vue. Les faillites et les licenciements vont augmenter après la suppression des régimes de protection. C’est le cours naturel d’une crise capitaliste. Les gouvernements bourgeois interviennent dans ce cycle en essayant de reporter une partie du poids de la crise principalement sur les capitaux individuels mais aussi sur le travail. Ils agissent ainsi parce qu’ils craignent que si la crise se déroule sans contraintes, le système soit confronté à un effondrement économique et à une révolution sociale. Cependant, une fois que le zénith de la crise a été dépassé, les coûts de ces politiques doivent être payés. Rien n’est gratuit dans le capitalisme et la théorie monétaire moderne (MMT), essentiellement keynésienne, est totalement erronée 3.

Le mouvement communiste et la gauche (digne de ce nom) doivent mener une politique de classe contre le capitalisme et, en même temps, lutter pour que le fardeau de la crise soit payé par le capital et non par le travail. Le système appartient au capital et, par conséquent, c’est le capital (et non le travail) qui doit payer pour sa double crise (sanitaire et économique).

Mais la gauche et le mouvement communiste doivent voir clairement qui est le véritable adversaire. Les antilibéraux larmoyants et les plaidoyers pour plus d’interventionnisme étatique ne remettent pas en cause les politiques capitalistes. Ils soutiennent simplement un changement dans l’administration et la gestion du système. Le néolibéralisme est mort et l’État bourgeois – qui n’est jamais parti sur les questions cruciales – est déjà de retour. Mais l’orthodoxie sociale-libérale d’aujourd’hui se contente de promettre à la classe ouvrière quelques aspirines comme remède aux cancers socio-économiques que le système crée. C’est ce retour de l’interventionnisme étatique qui soutient généreusement le capital et cherche à faire porter le fardeau aux travailleurs. Et ce sont les politiques néo-keynésiennes dominantes qui sont le vecteur de ce changement aujourd’hui. La gauche et le mouvement communiste doivent lutter contre toutes les formes de restructuration capitaliste, néolibérales et sociales libérales, et proposer le socialisme comme seule alternative crédible.

En termes de revendications transitoires, les communistes et le mouvement ouvrier doivent s’efforcer d’obtenir la démarchandisation des principaux secteurs de l’activité économique et la fourniture de leurs produits et services par le biais de systèmes publics. Le cas de la santé en est aujourd’hui le parfait exemple. La mise en place de systèmes de santé publics (dotés d’un financement et de personnels conséquents et sans formes indirectes de privatisation) est une nécessité urgente, surtout au vu de la fréquence des grandes épidémies contemporaines. Le financement de ces systèmes doit reposer sur de solides systèmes d’imposition progressive frappant le capital.

En outre, ils doivent s’opposer fermement à la “nouvelle normalité” que le capital tente d’imposer. L’affaiblissement des lois de protection du travail ne doit pas être toléré et ces dernières doivent être encore renforcées. Une attention particulière doit être accordée au changement prévu dans les relations de travail par le biais du télétravail et aux nouvelles formes de contrôle et d’intensification du travail que le capital cherche à imposer.

Dernier point, mais non le moindre, la pandémie de coronavirus et la “distanciation sociale” imposée ont fortement restreint les droits politiques et sociaux. Il est déjà évident que le système expérimente ces limitations tant pour leur application générale que pour de nouvelles formes de manipulation idéologique du peuple. La gauche et le mouvement communiste doivent fermement repousser ces efforts.

  1. Une forme de travail qui s’est répandue rapidement en raison de la pandémie est le télétravail. Sa diffusion a donné lieu à de nombreuses discussions dans les syndicats en Italie. Personnellement, j’ai associé cette forme de travail à l’industrie domestique analysée par Marx au chapitre 13 du Capital. Il semble que le paysage contemporain du travail évolue vers ce que Ricardo Antunes appelle l’”ubérisation” du travail – un modus operandi entrepreneurial imparable, qui recherche le profit et l’augmentation de la valeur du capital à travers des formes de travail précaire en expansion à l’échelle mondiale. Par conséquent, cette ” ubérisation ” du travail, ajoutée aux lacunes législatives et à leurs possibles conséquences néfastes, favorise l’émergence d’une série de difficultés liées au travail à distance : individualisation des tâches, isolement social, perte de l’action collective, augmentation de la charge de travail… avec des conséquences sur la santé physique et mentale du travailleur. Pensez-vous que cette forme de travail peut encore se développer ou qu’elle va fortement décliner dès que la pandémie sera terminée ?

J’ai déjà évoqué ce point dans les questions précédentes.

Je voudrais ajouter quelques éléments.

Dans le cadre de ses politiques de restructuration, le capital tente à nouveau de sous-traiter plusieurs emplois qui s’y prêtent. Dans le climat sociopolitique actuel, cette sous-traitance minimise les coûts du capital et les transfère aux travailleurs précaires (en les qualifiant d’”entrepreneurs d’eux-mêmes” et en essayant de leur inculquer cette idéologie réactionnaire).

Cependant, il y a des contradictions dans cette politique car le capital peut minimiser ses coûts mais il perd sa capacité à contrôler et diriger ces travailleurs. Le système d’usine a été créé avec le capitalisme car c’est seulement grâce à lui que la prérogative managériale du capitaliste a pu être réellement établie (subsomption réelle du travail par le capital) et que des augmentations continues de la productivité du travail ont pu être réalisées. L’”ubérisation” présente le danger pour le capital de perdre la capacité à diriger et à contrôler efficacement le travail. Pour éviter cette perte éventuelle, des coûts supplémentaires de surveillance et de contrôle (caméras, applications, etc.) sont engagés. L’équilibre final est loin d’être assuré. Il en va de même pour son impact idéologique.

  1. La pandémie a montré à quel point le travail reste central. Elle a démenti de manière flagrante toutes les analyses sur la finalité du travail qui ont vu le jour au cours des quarante dernières années. Est-ce une preuve supplémentaire de la validité de la théorie de la valeur travail de Marx ?

La théorie de la valeur travail de Marx tient en tout cas. La crise jumelée d’aujourd’hui, une fois de plus, vérifie la centralité du travail. Cependant, le capital et ses porte-paroles ont, même avant la crise, vanté la fin du travail par le biais du marketing de l’inexistante 4ème révolution industrielle 4. Le tournant vers l’automatisation pendant la pandémie de COVID-19 a renforcé cette attaque idéologique. Après tout, c’est toujours le fantasme du capitalisme d’un monde sans la présence gênante du travail. Le problème est, comme le montre très justement le marxisme, que s’il n’y a pas de travailleurs, il n’y a pas de capital.

Notes de bas de page

1. Stavros Mavroudeas, The Economic and Political Consequences of the COVID-19 pandemic – OPE-L lecture, 11 février 2021 ; Stavros Mavroudas, ‘The Economic and Political Consequences of the COVID-19 Pandemic’ in INTERNATIONAL CRITICAL THOUGHT, février 2021.

2. Le Workfare (littéralement « travailler pour le bien-être » en anglais) est une aide sociale des États-Unis apparue dans les années 1970, qui prévoit que les bénéficiaires aptes au travail doivent travailler en échange de leur allocation.

3. pour une critique, voir : Michael Roberts, Modern monetary theory – Part 1 : Chartalism and Marx, 28 janvier 2019.

4. pour une critique, voir : Stavros Mavroudeas, 4e révolution industrielle : mythe ou réalité ?, 17 juillet 2019, [].


The italian website Bollettino Culturale hosted the following interview with Stavros Mavroudeas on the COVID-19 pandemic and its consequences on the economy and labour

1. How do you judge the management of the pandemic in the European Union?

I have argued elsewhere (https://stavrosmavroudeas.wordpress.com/2021/02/11/the-economic-and-political-consequences-of-the-covid-19-pandemic-ope-l-lecture/ , https://stavrosmavroudeas.wordpress.com/2021/02/04/the-economic-and-political-consequences-of-the-covid-19-pandemic-by-s-mavroudeas-international-critical-thought/ ) that the COVID-19 pandemic is a twin crisis. The economic crisis was already simmering (because capitalism failed to devalorise adequately capitals after the 2008 crisis) and the coronavirus triggered and aggravated this crisis.

EU’s response was similar to that of the US but with a marked difference in policy ‘firepower’. As after the 2008 crisis, US and the EU embarked on social-liberal policies (hence, non-neoliberal policies) dictated by the now dominant New Keynesian Macroeconomic Consensus. These policies involve typical Keynesian measures: expansive fiscal policy and accommodating monetary policy. They also involve an insult to neoliberalism: discreet industrial policy. However, and contrary to the myopic and reformist anti-neoliberal ‘Left’, these policies are neoconservative and not in favour of labour and the working class. They share with neoliberalism putting the burden on labour but they radically depart from neoliberalism by actively using the public sector to buttress capitalist profitability.

As I already said, EU followed this path. But the ‘ammunition’ used (that is fiscal and monetary expansion) is markedly lower than that employed by the US. This derives from two factors:

  • Germany (and the ‘prudent’ block around it) do not want to expand these packages very much as they carry the main burden for their financing.
  • The US has more policy room for maneuvers because of the dominant role of the dollar as the main world reserve currency

2. Do you think that the NGEU money represents a potential radical change in European economic policies or will the emergency be used for a transition to a worse model of society than the pre-Covid one?

As I already argued, these social-liberal neoconservative policies won’t ameliorate the position of labour. The NGEU is a tool for restructuring European capitalisms in the face of the US and China antagonisms. Its priorities favour specific sectoral interests (grossly dictated by the main EU conglomerates) and following an industrial strategy aspiring to enhance their position vis-à-vis their US and Chinese counterparts.

The NGEU obeys the directive of creating ‘European champions’ (that is big European multinational conglomerates capable of confronting US and Chinese competitors). Therefore, it will lead to the increased concentration and centralization of capital (that is oligopolisation and monopolization). This will hit hard peripheral and Mediterranean capitalisms that are characterized by a huge layer of mid-size enterprises. Regarding labour, there is no commitment to increase wages. On the contrary, the planned recovery is based on keeping wage costs low. Of course, capitalism may make plans, but it is also riddled with contradictions. Thus, because of this violent capitalist restructuring, there appears nowadays – at least regarding specialized labour – a lack of labour supply which results in increasing wages in these sectors.

3. For the post-pandemic future, do you think the Green New Deal is a strategy to support? In recent months there have been many discussions within the unions in Italy on the use of this type of economic policies to create well-paid jobs for graduates, to foster a situation of full employment to be associated with «job guarantee» policies. What do you think about it?

The Green New Deal is part and parcel of these neoconservative social-liberal capitalist restructuring. It has been promoted as the Keynesian New Deal of our times. And the myopic and reformist majority of the Western ‘Left’ immediately jumped upon it and acted as the best marketing advertisers of capitalism. The Green New Deal is to great extent a crypto-protectionist industrial strategy that aims to support Western capitals against the challenge from China and the emerging markets.

It is green only in name as it oscillates between (a) fending off competitors (with worse green credentials) and (b) not hurting the vested interests of Western capitals (by imposing to harsh green restrictions). Recent regulatory tugs-of-war regarding energy and shipping are exemplary cases.

It does not envisage increasing wages. This is a fantasy of the majority of the reformist Western ‘Left’. On the contrary, because of the capitalist restructuring that it entails, many gobs will be lost. In Greece there is a typical example with the abrupt ending of lignite electricity factories. This has increased the electrical energy costs for the Greek economy (which trickle down to consumers’ bills and increase energy poverty) and is devastating the regions with lignite (causing increased unemployment and poverty). Of course, on the other hand, it favours specific entrepreneurial interests with huge influence on Greek governments (SYRIZA included).

There is no full employment and increased wages in the fairytale of the Green New Deal. Trade unions that play this game are simply pawns of capital. If one has a look at mainstream environmental literature he will discover that one of its stylized facts is that the existence of trade-unions is anti-environmental because they favour wages over green policies. The conclusion is that these two are contradictory.

4. The pandemic has demonstrated the shortcomings of welfare in Europe due to the austerity policies of past decades. Do you think this experience can be used to reform welfare for the better? Some communist organizations have proposed a universal basic income to solve the problems related to the lack of income created by the lockdown. Do you think it is a viable solution and with which to solve the problem of unemployment in Europe or rather that it represents a resignation towards the high unemployment rates in our countries?

In the short-run and in the mid-run there is an increase in funding the public health sector because it is the only one capable of confronting the pandemic. However, the more profitable areas (vaccines, drugs etc.) have been kept for the private sector and subsidized with public money. I expect that, once the pandemic has ebbed, to reverse at least some of the expansion of the public health sector and reinvigorated the share of the private health sector.

Regarding the welfare system in general, social liberalism is no better than neoliberalism. Social liberalism wants also to curb public expenses; particularly in the aging Western economies. However, it is cleverer than neoliberalism and comprehends that the public sector has to be the backbone of the system and bear the main costs. Also, that strict regulation by the state or para-statal bodies (like the infamous independent supervisory authorities) is required or else private capitals will cause a havoc.

I totally disagree with the idea of the universal basic income. It is a neoconservative proposal mouthed initially by M.Friedman. It is being considered by social liberals and neoliberals alike as a low safety net to prevent social upheavals and revolutions. It will also work as a disincentive to struggles for increasing wages. It reminds Roman empire’s policy of ‘bread and circuses’ in order to keep the Roman proletariat subdued.

5. The working day in Greece was recently extended to ten hours. Can you explain to us what restructuring plan of Greek capitalism is behind this political choice?

This is part and parcel of the neoconservative labour flexibility policies (which again the majority of the myopic and reformist Western ‘Left’ espoused and touted). It will extend the actual working time at the expense of growing unemployment. It will increase also the rate of surplus-value (that is labour exploitation) as overtime is practically abolished (which was paid higher) and extra work-time is not paid but rewarded with additional vacations (!!!). Greek capitalism’s plan is to suppress further wage costs.

6. In Italy we are discussing in these days about the end of the ban on redundancies. The unions have opposed the idea of a selective end of this measure based on the situation of each individual sector, proposing a reform of the social safety nets. Are there similar discussions in Greece?

There is a general governmental declaration that the public budget is exhausted and that, once the pandemic has ebbed, these employment protection measures will be withdrawn. In Greece, firms that took subsidies and support against the pandemic where required not to fire their workers. On the other hand, their workers, once put in employment suspension (that is worked less) were paid only a fraction of their normal wage. Nowadays, many entrepreneurial mouthpieces (particularly from the disgracefully uninhibited tourist sector) tout that these employment protection schemes are disastrous as workers prefer to take these subsidies instead of working for meagre wages in other places from their residence.

There is another complication. These employment schemes have facilitated statistical tricks with the unemployment rate and thus kept it artificially low. This is necessary for the right-wing New Democracy government as it tries to engineer a double-election plan probably in autumn (banking upon SYRIZA’s dismal performance). Increased unemployment is not good for this electoral strategy. Thus, the government shies away for the time being from shedding these employment protection schemes. But in the end, elections or no elections, it will abolish them.

Official trade-unions (GSEE etc.) in Greece are mainly government’s and capital’s stooges. So no serious discussions on these issues takes place and the public does not pay, in any case, attention to them.

7. In this phase of economic recovery, Italian entrepreneurs are criticizing citizen’s basic income (a form of workfare still not functioning). Young people prefer to receive this income rather than very low wages for many hours of work in the tourism or catering sector. Instead of raising wages, they are demanding the cancellation of citizen’s basic income. This story makes a problem glaring: many workers are poor even though they work because of very low wages. In my opinion, it is a problem linked to the Italian production system specializing in low added value products. As a result, many companies can stay on the market either with public money or by lowering wages and canceling workers’ rights. Will these problems be exacerbated by the consequences of the pandemic? How should a political force that defends the workers intervene on these problems?

I have already replied to this in previous questions. Let me codify my view. Bankruptcies and redundancies will increase after the removal of the protection schemes. This is the natural course of a capitalist crisis. Bourgeois governments intervene in this cycle by trying to defer some of the brunt of the crisis mainly on individual capitals but also on labour. They do so because they fear that if the crisis takes place without restraints then the system will face economic collapse and social revolution. However, once the zenith of the crisis has been surpassed then the costs of these policies have to be paid. There is no free lunch in capitalism and the essentially Keynesian Modern Monetary Theory (MMT) is totally wrong (for a critique see https://thenextrecession.wordpress.com/2019/01/28/modern-monetary-theory-part-1-chartalism-and-marx/ ).

The Communist movement and the Left (that is worthy of its name) should pursue class politics against capitalism and at the same time fight so as the burden of the crisis is paid by capital and not labour.

The system belongs to capital and, hence, it is capital (and not labour) that must pay for its twin (health cum economic) crisis.

But the Left and the Communist movement must see clearly who the real adversary is. The lachrymose anti-neoliberalists and the pleas for more state interventionism do not challenge the capitalist policies. They simply support the change of the system’s administrators. Neoliberalism has died and the bourgeois state – which has never left on crucial issues – has already returned. But today’s social-liberal Orthodoxy simply promises to the working class some aspirins as cure for the socio-economic cancers that the system creates. It is this returning state interventionism that generously supports capital and seeks to pass the burden on workers. And it is the dominant neo-Keynesian policies that are the vehicle of this change today. The Left and the Communist movement must fight against all forms of capitalist restructuring; neoliberal and social liberal and propose socialism as the only credible alternative.

In terms of transitional demands, communists and the labour movement must strive for the de-commodification of key areas of economic activity and the provision of their products and services through public systems. The case of health case is today the perfect case in point. The establishment of public health systems (with strong funding and staffing and without indirect forms of privatization) is an urgent need; especially given the frequency of contemporary major epidemics. The financing of these schemes must be based on robust progressive taxation systems hitting capital.

Additionally, they must stand firmly against the ‘new normality’ that capital is trying to impose. The weakening of labour protection laws must not be tolerated and the latter must be further strengthened. Particular attention must be paid to the intended change in employment relations through telework and the new forms of control and intensification of work that the capital seeks to impose.

Last but not least. The coronavirus pandemic and the imposed ‘social distancing’ have severely restricted political and social rights. It is already evident that the system is experimenting with these limitations both for their general application and for new forms of ideological manipulation of the people. The Left and the Communist movement must firmly repulse these efforts.

8. One form of work that has spread rapidly due to the pandemic is smartworking. Its spread has led to many discussions in trade unions in Italy. Personally, I associated this form of work with domestic industry analyzed by Marx in Chapter 13 of Capital. It seems that the contemporary labor landscape is moving towards what Ricardo Antunes calls the «uberization» of work – an unstoppable entrepreneurial modus operandi, which seeks profit and the increase in the value of capital through forms of precarious labor expanding on a global scale. Therefore, this «uberization» of work, added to the legislative gaps and their possible harmful consequences, favors the emergence of a series of difficulties related to remote work: individualization of tasks, social isolation, loss of collective action, increased load of work … with consequences on the physical and mental health of the worker. Do you think this form of work can still expand or will it decline sharply as soon as the pandemic is over?

I have already referred to this in the previous questions.

I would like to add a few points.

As part of its restructuring policies capital attempts again to subcontract several jobs that are amenable to this. In the current socio-political climate, this subcontracting minimizes capital’s costs and shift them to precarious workers (branding them ‘entrepreneurs of themselves’ and trying to instill to them this reactionary ideology).

However, there are contradictions in this policy as capital may minimize its costs but it loses its ability to control and direct these workers. The factory system was created with capitalism because only through this the managerial prerogative of the capitalist could be really established (real subsumption of labour by capital) and continuous increases in labour productivity achieved. ‘Uberization’ poses the danger of losing capital’s ability to efficiently direct and control labour. In order to avoid this possible loss, additional costs of supervision and control (cameras, applications etc.) are incurred. The ultimate balance is far from sure. The same holds for its ideological impact.

9. The pandemic has shown how central work still is. It blatantly denied all the analyzes on the end of the work that emerged in the last forty years. Is this further evidence for the validity of Marx’s labor theory of value?

Marx’s Labour Theory of Value holds in any case. Today’s twin crisis, once again, verifies the centrality of labour. However, capital and its mouthpieces have, even before the crisis, touted the end of labour through the marketing of the non-existent 4th industrial revolution (for a critique see https://stavrosmavroudeas.wordpress.com/2019/07/17/4th-industrial-revolution-myth-or-reality/ ). The turn towards automation during the COVID-19 pandemic has increased this ideological attack. After all, it is always capitalism’s fantasy a world without the annoying presence of labour. The problem is, as Marxism very appositely shows, that if there are no workers then there is no capital.

I.I.Rubin and the fallacies of old and new «Rubin schools’ – S.Mavroudeas

Presentation at the 3rd Marx World Congress organised by the School of Marxism, Peking University, Beijing 17-18 July 2021


I.I.Rubin’s Essays on Marx’s Theory of Value played a crucial role in the 1970s Value Debate between Marxist and neo-Ricardians as it gave inspiration and support to the Marxist argument about the social dimension of the political-economic analysis and also about the difference between Marx’s and Ricardo’s LTV. However, the subsequent self-proclaimed ‘Rubin school’ overemphasized the social dimension and neglected the technical dimension of value. This led to a theory of form without content by identifying immediately value with money and thus abandoning labour values and substituting them with monetary prices. This old ‘Rubin school’ betrayed both Marx and Rubin as the latter never ascribed to their fallacies. Nowadays, a new stream of ‘Rubinists’ (e.g. the proponents of a monetary theory of value) appear that again identify immediately labour values with money and thus also make labour values redundant. This paper argues that the new ‘Rubinists’ betray also both Marx and Rubin and, moreover, fail to understand the essential working of the capitalist economy.

The powerpoint of my presentation follows:

The video-recording of my presentation flows: