Saturday, 21 February 2015

Greece: Some Short Notes on Backing Down

I won't waste time going over the immediate background to Greece's capitulation. By now anyone reading this will surely know the negotiations' essentials. In the aftermath, much of the financial press is relishing a possible reaction by unsettled "├╝ber-Keynesians" and "neo-Marxists" in Syriza's ranks. By this they presumably mean anyone not intellectually shackled to neoclassical economic assumptions and angry at a looming return to austerity as supervised by the troika. From the look of the deal Varoufakis has made, a reaction of some force is deserved.

The deal betrays not only Syriza's commitment to democracy, but also the coherent economic critique developed by Syriza intellectuals like Costas Lapavitsas and Varoufakis himself. This critique, which gave Syriza real intellectual novelty, focused on the structure of the eurozone and the role of German surpluses in creating vast peripheral debt. The short of it is that Germany has tended to keep wage growth below productivity, undercutting ECB inflation targets and sustaining its export competitiveness to the detriment of importers like Greece. Huge German profits from exports were then recycled into finance, which was then leant back to households in the peripheral economies. The likes of Greece could not compete with German exports, couldn't help but get in debt to Germany, and because of the shared currency couldn't devalue to reanimate their export sectors. When banks inevitably went under after the US mortgage crisis in 2007-08,  liquidity seized up,  leaving households mired in unpayable debt. Banks were bailed out and in turn started speculating against the sovereign debt of those peripheral states which had recently paid for their bailouts. Thus the sovereign debt crisis broke out because of the structure of the EMU, the role of Germany in the eurozone, and the volatility of financialised economies.

What were the policies that logically followed from this critique of the euro crisis? In short, the critique suggested  that peripheral economies like Greece should: reinvigorate domestic demand; encourage investment on the basis of this demand; aim for productivity increases on the basis of this targeted investment in key sustainable industries; then increase wages  on the basis of rising productivity, thus contributing to demand and further growth. This could be a classic virtuous Keynesian circle of demand management, deficit be damned. The problem was always that, in order for such a strategy to work in the periphery, Germany would have to sustain competitive losses. It too would have to let unit labour costs increase in line with productivity. It would have to get over its terror of inflation. It would have to accept that its enormous trade and current accounts surpluses were not necessary for future European development. The suggestion that Greek politicians could impose this reversal of ends in the German "discursive formation" is deeply misguided.

What then did Varoufakis want and why is his retreat so devastating for the democratic hopes of Greece? Put succinctly, Varoufakis believes in the progressive potential of the euro. He believes in a hegemonic Germany in Europe, a smart currency union equipped to tackle fiscal imbalances, and a future where European prosperity is vouched for by the ECB. Although plausible, in practice, Greek political pursuit of this  pro-euro outcome takes an increasingly pro-German form. Pursued safely within the confines of EMU precedent, any future form of fiscal integration will accord with German power. De facto Varoufakis is willing to trade off all Greek democratic aims in order to keep open the long-term goal of EMU reform from within. But he cannot win by fighting the battle on the terms of German power. His limitations are analogous to the structural subordination of Greece in the union. The export orientation of Germany is presently being universalised as a simple, self-evident moral good by a very strong Germany "moral economy." Austerity as an impetus to thriftiness has become an absolute - regardless of austerity's damaging effect on demand. In negotiations Varoufakis appears to have accepted all the moral assumptions of German power, despite a long academic career of challenging them. The reality of German surpluses is peripheral deficits. This much is obvious. Varoufakis can no longer publicly state this - along with the need for cuts to Greek debt and serious reversals to austerity in Greece - because he is wedded to the euro.

The reasons for the Greek retreat are not simply a matter of weakness. Varoufakis really believes that European leaders can be made to believe in a Keynesian plan for growth. However, Germany will not risk its trade surpluses because of the extraordinary role played by thriftiness in its moral make up.  Add to this any risk to the euro's world currency chances and the rejection becomes total. Without any kind of concession of this kind possible in Germany (short of a sudden, utterly remarkable landslide for Die Linke), no Greek government can really tackle systemic Greek weakness. The same is true of Italy, Spain, Portugal, and France. Yet their alliance alone could not permit the defeat of German capital.

What then could defeat German power as embodied in EMU? The answer is obvious: default, exit, devaluation and a new round of public investment. Committed to increasingly distant and conservative reform of the euro from within, Varoufakis has refused to countenance this. To the detriment of Greece and Europe, Syriza has lost a vital bargaining tool as a result. Welcome back, then, austerity.

Saturday, 7 February 2015

On Belief

There are two generic types of statement of belief, a fact which leads quite naturally to the idea that there must be two types of thing called belief; two things that just happen to share the same name. Here are two examples:

a. "I really believed that the Saddam regime had weapons capacity that posed an immediate threat to the west and to Saddam's own people."

b. "I have an abiding belief in the Christian God."

In both cases the speaker is the same: former UK Prime Minister Tony Blair. Like many of us he is quite able to make both kinds of statement of belief - often in the same conversation - without feeling there to be any kind of conflict at all between them. Statement (a), whether true or in fact a lie, is logically quite plausible: it is possible for someone to believe that a certain fact can be derived from a certain state of affairs. Inductive reason, this statement suggests, had led him to conclude that Saddam must be in possession of Weapons of Mass Destruction. Statement (b) is quite different. It is quite absurd to think that it is based on any process of reasoning from observation, that the speaker has amassed appropriate cosmological evidence and derived from it the theory that God indeed exists. In fact, it is only fanatics who collapse these statements into the same thing, such as the very earnest young men in London's Brick Lane who once informed me that the Second Law of Thermodynamics proved Allah's existence. They had full-colour books with diagrams to demonstrate as much.

Since the two are so different, why not dispense altogether with this semantic space-sharing, freeing the two concepts once and for all from their awkward joint tenancy to pursue their separate housing destinies alone? After all, it would have been quite possible for Tony Blair to say, "I really trusted the evidence that..." or "I reasoned upwards from the evidence before my eyes that..." or "Making what conclusions I could from the meticulously assembled and arranged dossiers of my perhaps over-zealous advisors I decided that..." These would have done much the same job - their truth value, as I said, being a quite separate matter from their internal logic. After all, isn't this fusion of concepts we now quite happily distinguish between just a formal-linguistic hangover from a more barbarous age when speakers lacked the finesse of separating reason from belief?

Well, calling statements like statement (a) something different, and no doubt less catchy, does nothing to explain the status of statements like statement (b). Transhistorically, I'd wager, belief in God has always meant something different to the belief that the tiger will eat me if it gets a chance or the belief that the frayed, sagging rope bridge will collapse into the abyss below if I try to run across it. In fact, the more you think about it the less statement (a) seems all that loftier than the likes of statement (b) after all. Yet, it is of some kind of different order of statement. But there is no reason to assume it inhabits some statelier realm of thought.

The transparent obviousness of their difference is further muddied when we think about the many different instances of statement type (a). Indeed we may want to introduce a subdivision between those (call them a1) where we must directly complete an act of induction and (a2) where the induction has already been done for us. An example of (a2) might be when we, say, go to the toilet and trust that gravity will draw our bodily expulsions downwards instead of upwards. Then again, has anyone (outside of space) ever doubted this result and had to puzzle out whether or not to risk going for a wee? Does that make (a2) type statements closer in fact to type (b) statements? Do they operate on blind faith and casual assumption, on the individual surrendering her or his probing, rational intellect to a dulled collective incuriosity? The rejection of such acts of faith would put us in an absurd position, like that of Sartre's protagonist Roquentin in his novel Nausea, who rejects the complacency of the citizens of Bouville on the grounds that they have not clearly established for themselves - that is, assumed the full weight of their responsibility to know - how a chair may not become a tongue or a chestnut tree a giant phallus.

One can question altogether the notion that type (a) statements are inductive statements in the complete sense. Do they lead necessarily to a general theory or are they always, at a certain point, preliminary if not abortive? We did not arrive at a general theory of gravity from understanding that rivers flowed from mountain source towards the sea. And in fact, at most points, the observation would have halted at precisely the point of particularity: this river flows from its source to the sea... or somewhere unknown. The thought of generalising to all rivers would have come later, with the concept 'all rivers' and the concept 'world'. What's more, stopping short of such generality may be a strength rather than a weakness of practical thought.

How, then, to grasp the similarity between statement types (a) and (b) as more than merely circumstantial? For an empiricist the answer might be that, since all beliefs are reasoned from experience, God-belief and gravity-belief statements are of the same kind. It is simply that gravity-belief statements can be shown to be well-founded because they are based on observations that come from within the realms of human experience. But then aren't we guilty of doing the exact same thing as the earnest young men in Brick Lane who believe that they can prove God's existence with reference to physical laws? We turn the validity of statements of religious belief into a matter of evidence. Fine, you might think, let's relegate all belief to this status and simply dispose of religious belief - no great loss. Until you consider that neither observation nor custom are fit to evidence the universality of human rights or the rational principles of equality. Actually, Hume's analysis is a good deal more sophisticated than this, since he argues that the question of God's existence is simply debarred by human experience. It is unanswerable - but also essentially uninteresting.

Yet when somebody tells me that they believe in God or the Rights of Man I don't understand the statement the way I would if they told me they believed that the evidence in the Oscar  Pistorius case was convincing enough to convict him of murder. What's interesting here is that only the latter really requires a leap of faith - since, of the two, it is the only one that makes a claim on any evidence. For quite bald statements of facts - like the hair colour of the person in front of us; or our own names when we are compos mentis - it would be odd to say, "I believe that your hair is blonde" or "I believe that my name is Hillary." The power of inductive reasoning is that its provisional conclusions rely on attaining a degree of abstraction that cannot be derived directly from the starting point. This is, of course, the difference between deductive and inductive reasoning. The statement about religion makes neither type of claim. Indeed, rather than a leap of faith, statements of belief in God are performative. They do what they say. These statements enact belief, reconfirming it in a similar if less painful way to self-flagellation.

To really get to grips with statements of religious belief we have to at least know that they come embedded in a context. In a syntactical sense, of course, there is no qualitative difference between saying "I believe in the omnipotence of the Christian God" and "I dance in the transparency of the beige Ether." What makes the former meaningful for us (as opposed to simply grammatically correct) is not some process of inductive reasoning but the symbolic order that it articulates and that we recognise through it. This is not down to grammatical structure or to inductive reasoning but to the way language constructs the social order in which our actions attain their meaning. This is what Jacques Lacan called the order of the symbolic: a language-mediated world of shared culture which we enter into when we construct meaningful sentences. What belief in God and belief in the findings of some ethnographical research have in common is neither the sharing of a particular conception of belief, nor simply a syntactical coincidence, but participation in a social process whereby meaning is established through convention. The name given in Lacanian psychoanalysis to the product of this process of establishing meaning through negative differentiation (i.e. the "logic of the signifier") is the symbolic order. Therefore, where both types of belief-statement coincide is in their shared articulation of different kinds of subjective commitment to something beyond onself.

Sartre, caught as he was between phenomenology and Marxism, is not very fashionable today. Yet it may be worth returning to his view of subjectivity in order to throw some light on the status of belief statements like "I believe in the omnipotence of the Christian God." Sartre took human consciousness as a starting point from which he developed a dialectical theory of subjectivity. It was not that he believed that language, the social world, and the "whole human adventure" didn't precede the individual; it was simply that an understanding of the "practical relations" between "men" was only possible from the position of the individual (a pan-social "perspective" was ruled out by the very fact that the individual observer was mediated by that society). Now, because Sartre felt that when new knowledge entered the universe of the subject the subject itself was transformed, he argued that "non-knowledge" itself played a key role in constituting subjectivity. The partial-sightedness of the subjective position was not simply a flaw, a limitation of vision, but was the characteristic which allowed that subjectivity to make sense of the world. Thus, the limits of the subject appear as barriers in the real world. Sartre gives the example of how partially-deprived eyesight is simply compensated for by the extra work of the eye, with the field of reality re-constituted through the eye's renewed efforts. The absence of full vision is integrated by the subject as a new, different totality, recognised as complete in-itself.

We need to ask ourselves, when assessing statements of belief, how new knowledge is integrated into a subjective position, and what happens to the subjectivity through this process. This is the question that should be posed to those who believe religious belief is "irrational": How do they propose to "enlighten" the world? By simply shining the light of reason upon it! What this ignores is one's own complex, subjective entanglement with the world. It is rare indeed that religious believers intend their professions of belief to contradict scientific discovery; rather these kinds of belief-statement are living attempts to resist the subjective integration of some new mode of control. "I simply believe..." is a form of resistance, a means of deploying the accumulated "practico-inert" - the old power of the symbolic - against some new challenge. One might go further than the atheist Sartre: the stakes in such arguments are not those between "reason" and "unreason", but those of ideological warfare. Not irrational leaps of faith, but reactionary deployment of a power that at least discursively precedes the world of capitalist modernity. As such "I believe..." has a profound oppositional force. In fact, professions of belief in the values represented by the American constitution or flag are no different really than professions of belief in the truth of the Bible or the Koran. We should question what it is about the contemporary conjuncture that not only summons forth such discursive resistances but conjugates them with altogether more tormenting exactions on the perceived enemy.