Stop exploitation of unskilled labour... by confiscating wages!

I am sure plenty of people who didn't vote Conservative have had this feeling in the last fortnight, but then perhaps not. It is like having your head slowly but firmly submerged under water as you nod glassy assent. Dim and distantly through the water, dull Muzak further soothes you, an affectless, martial swing burbling interminably. You think vaguely of twisting or writhing, but there's nowhere really to turn.

It was that feeling that came over me today as David Cameron talked warmly across all news outlets about a few little things he plans to pop into the Queen's speech this year. Just a few treats as thanks to the public for his surprise majority.

The government would, he promised, tighten up the law - hardly lax now - on illegal earnings. Illegal in the sense of being earned by people without legal work permits, mind. Nothing about tax. That can wait. These illegal earnings are made by the dreaded "unskilled" - those sleepless undead yawning out of the scorched Krajina and intent on devouring our beleaguered benefits system. Fortress Welfare looks on and trembles.

Cameron will provide the police with sweeping powers to confiscate the wages of the lowest paid and most vulnerable people in the country. Never mind the gang masters. Never mind the traffickers. Never mind decent labour market regulation or the living wage. We need to "make Britain a less attractive place to work illegally." It will soon be such a noxious swamp that he might just get his way.

The logic of Cameron's position is basically simple: there is nothing you can do about employers, but you can punish workers. In his experience, the poor saps will basically take any shafting he can throw at them. It is probably mildly bemusing, but he is hardly going to question it. The PM has also had alarming fits of economic illiteracy in the past - like the time he politely suggested all indebted Brits pay off their credit cards at once. Never having wanted for much, perhaps it doesn't occur to him that demand is something that can be effectively stamped out when people have no cash. Here it is similar: apparently immigration puts a strain on welfare. No, it doesn't. Immigrants - like them or not - contribute more than they take out, by the billions. Unemployment and low wages put a strain on welfare because both reduce the government's tax intake.

Surely the Queen - lovely old dear that she is; that definition of haute bourgeois civility - won't swallow it? But what if even the Queen wants to send them home?

This nasty consensus is not just nasty - it is also a farce. Attacking immigrants and/or the 'elites' who cater to them is a sort of wilfully blind fury, in which everyone gets to be angry and at the same time avoid taking real action. It is a fetish. Belief that immigration is an apocalyptic force allows people to simultaneously conceal and revel in their own political impotence. It is nihilism dressed up in vaguely Chiliastic, cultish frenzy. And I suppose that dull ringing in my ears stems from the same place.

Comrades, Kindly Stop Smashing Things

It shouldn't need pointing out but clearly some comrades haven't got the message - either from the public at large, the media in general, or indeed from serious left-wing strategists -  that smashing stuff up is not going to bring you any propaganda victories in a war you're already badly losing. The fact is you might think the Tories are scum, but much of the public does not. Scrawling that message - just roundly rejected at a general election - on a hallowed war memorial during VE Day celebrations smacks either of stupidity or despair.

The left - or what remains of it - likes to talk about strategy, though not in the way parliamentary parties talk about strategy and the relentless pursuit of their "message." For the left strategy is the opposite of what goes on in elections: because it is made up of different political tendencies and types of group, the left favours debate and discussion over order and rigid discipline. This is a good thing. But these strategies occasionally become fixed in polar oppositions that are deeply unhealthy and rigid. The opposition between parliamentary reform and insurrection is one such fallback, ever ready to ensnare the left in defeat. By getting stuck on these rigid distinctions, groups risk turning inwards and, most damagingly, forgetting events and ideas in the wider world. The analysis of the concrete situation - with all its ideological twists and turns; with all the messy upheavals internal to the power bloc - gives way to melancholy and fatalism.

There is little permanence in the world of political strategy. When times change, ideas and people change too. But there are a few things we can say with reasonable confidence; one being that, if there ever was a time when tagging Whitehall and beating on a phone box was a broadly effective propaganda tool, now is not it. We are not at the Bastille; we are mostly on street stalls and in dole queues. We are not Luddites in the midst of industrial takeoff either for that matter. It shouldn't take the most farsighted social critique to understand that attacking shopfronts or throwing stones at police is not a winning formula. Moreover, these riots are both symbolically and actually different to, say, violent anti-cop protests in Baltimore or even the riots in London. Why? Because the latter could be understood as major social upheavals and protests deeply rooted in the outrage of whole communities. Like it or not, pseudo anarchist projectile throwers with their Banksy-lite iconography are seen as brattish. And not just by the right-wing press. There is a broader "counter-hegemonic" platform to be built by the left, one which can win "hearts and minds", so to speak. The right is very good at fighting the "war at home"; we should learn how to do this for the left.

I fully intend to go to People's Assembly meetings and marches. It's urgent that we show a united front against austerity. It's also extremely important that we start developing some more critical strategic skills. Our enemies in government surely already have. We need to understand why people vote Conservative. Sure, papers can lie, but only certain lies capture the imagination and articulate popular desires. What makes the myth of austerity so appealing? How can we build a counter-narrative from the ground up, with few allies in the old print media? All these are questions that we can ask at such events. We can also draw others into our conversation. But let's be honest: throwing a few stones proves nothing except that we have no answers and are unwilling even to pose the questions.

We need to look to countries in Latin America, and to Greece and Spain. There movements for social justice began commanding first pluralities and then wholesale parliamentary majorities (in some cases for decades) through peaceful community action, through strikes and marches, through holding meetings, and asking questions. They never won over the private media, and neither will we. So instead they went round the back of them, operating at every alternative social level, and eventually finding themselves challenging neoliberalism and austerity in local and often national government. Their trick was to convey the dignity and sense of justice of ordinary people in unconventional forms. That kind of dignity is rarely visible in the mainstream - which prefers to demonise working and unemployed people - but it is the truly insurrectionary truth. I sympathise with the fury of some left-wing activists. But if we are going to get anywhere we need to be smart, not just angry.

A Tory coup? It was Labour that puts its own head on the chopping block

A coup is apparently coming. At the New Statesman today Owen Jones writes of a plot hatched by the right-wing media and the Conservative Party to patch together the previous coalition and carry on much as they were before the election. However, as the ex-leading Party in government and quite possibly the largest in parliament, Cam & Co. will have every right to do so. Their shrill backing by large sections of the media - which has been scarily united in its viciousness toward Labour and the SNP - may be patently unfair. It is, however, to be expected from a power elite wedded to the Union and to free markets. Except, of course, in Scotland where - astonishingly - the pro-Union Murdoch press has swung behind... the SNP. Anyone but Ed, was how John Lanchester summed it up in his LRB article this week.

The problem with Jones's coup argument is he puts none of the blame for this at Labour's door. True, a Party polling 35% is limited in its power to challenge how its enemies think. But if Labour is to have any significant effect on the world, it will have to make strategic interventions on its enemies' weak points. Miliband did this - to a degree - during the hacking scandal. Basically, he kicked Murdoch when he was down and then retreated. It was a graceful, bullied-kid-in-the-school-playground move for which he is to be commended. But overall Labour has been scared of intervening in this way in moments of particular crisis and of weakness in the field of  political forces since 2010. Though there has been no shortage of moments ripe for intervention in British political life, Labour under Miliband has lacked the will power and sense of direction to challenge the bigger kids in the playground. Thus the false narrative of Tory austerity -which failed after 2012 - and the crooked story spun by Unionist elites during the Scottish referendum went unchallenged. No wonder the SNP has snatched the ball from a dithering Labour on both points.

Imagine this: after supporting unity in the Scottish referendum, Labour could have launched a home rule proposal, undermining the centralist and reactionary Tories whilst sidestepping the SNP threat. It didn't because the Miliband leadership lacks the basic cognitive mapping to challenge Tory myths, at least when it comes to the Union and to the economy. This comes partly from Miliband's eagerness - like so many "progressive" leaders since 1989 - to accept the present reality. Social-democratic tradition since the end of communism - perhaps even before - dictates that the right leads on sovereignty and economics.

Today's social democrats are the postmodern Stoics, fully at ease with natural and inevitable markets: "Sick and yet happy, in peril and yet happy, dying and yet happy, in exile and happy, in disgrace and happy." Recently, writers on the left have started talking of Pasokification: named for the unloved and unmissed Greek socialists, this is a process wherein a party of the traditional centre-left sinks rapidly from a position as the natural party of government to one of electoral oblivion. One would expect, at the very least, some heroic rage against the dying of the light here. But it turns out that - as with Nietzsche's last men - the most telling symptom of Pasokification is that those in its grip meet their fate with a sort of medicated contentment. "A little poison now and then: that makes for pleasant dreams. And much poison at the end for a pleasant death," he says. Not with a bang, then, but in a stupor. So goes European social democracy to the chop - drunk on its own self-deception and convinced to the last it stayed true to nature's and to history's laws. It will receive no courtesy from the triumphant Right it did so much to make comfortable.

If, however, Labour or other left parliamentary forces find they want to successfully intervene in the field of forces that constitutes politics they might have to say things that are actually unpopular - at least with the mainstream media. Of course, they must choose their moment. Antonio Gramsci's notion that the balance of political forces is in "unstable equilibrium" implies that - with strategic precision - an intervention can shatter that equilibrium and reshape it. Miliband has seemingly done all he can to avoid the risk of rocking the apple cart recently - an aversion that has meant losing out on important opportunities to reshape the field of combat. Moreover, he has gone to great, noisy lengths to dodge any association with the SNP. This strategy of refusal to open up the Party to criticism from the right is proving disastrous. The right-wing criticism comes in floods all the same, while Labour deliberately closes off its few routes to power. More broadly, this sticky electoral mess is indicative of the mire that has been sucking recent social democracy under. On past form, it is unlikely the British brand will be rekindling its fires in the next few days. If it is on its way to the chopping block, Labour at least is proving inebriated enough not to feel the sting.

The Tories and their media allies are simply exploiting a Labour weakness the leadership has done nothing to combat. Deja vu, anyone?

Austerity: The Almost Myth

So Labour "bankrupted" the economy by spending too much on welfare dependents? Let's look again at that claim, made by one very angry man  - along with the national media and the Tory party, repeatedly for five years - on TV this week. As is so often the case, Ed Miliband "stumbled" in response. Here's what he might have said in a more rational world.

Public debt fell in the early years of the Labour government and then increased as growth slowed in the late 2000s. See the proof here:

http://en.m.wikipedia.org/wiki/United_Kingdom_national_debt

In fact, welfare spending rose in absolute terms throughout Labour's time in power - though as a percentage of GDP it actually fell slightly. Channel 4 reports this here: 

http://www.channel4.com/news/welfare-bill-out-of-control-labour-reform  

This is important: spending as a proportion of GDP, in the context of an ageing and increasingly sick population, fell during Labour's tenure.

Why did the debt increase so precipitously after 2008? For one, growth collapsed and tax revenues declined. Expenditure on things like out-of-work benefits increased automatically  as a necessary result of a collapse of economic activity and a fall in total employment. This is inevitable in a downturn. 

But the crisis went deeper: over leveraged banks had to be bailed out and deposits secured in order to prevent financial meltdown. In 2010 the National Audit Office reported: 

"The scale of the support currently provided to UK banks has fallen from a peak of £955bn to £512bn, but the amount of cash currently borrowed by the government to support banks has risen by £7bn [to a total of £124bn] since December 2009."

That report is quoted here: http://www.theguardian.com/politics/reality-check-with-polly-curtis/2011/sep/12/reality-check-banking-bailout 

The Guardian, in the same report, found that the government had initially offered £1.2 trillion to the banks, presumably to secure confidence. The amount actually spent was £123.93 billion. How much of this gets paid back doesn't concern us here, since all I want to show is that it was this borrowing - as opposed long-term welfare expenditure and a culture of dependency - that increased the national debt. Here's Keynes biographer Robert Skidelsky in the Newstatesman:

"In short, the big holes in the public finances inherited by the coalition when it took office were the result not of misguided splurging, but of the sudden emergence of deep craters in the British and world economy. This is confirmed by a 2011 IMF report, which calculated that of the 37 per cent increase in UK public debt from 2007-2011, 25 per cent was due to loss of revenues, 7 per cent to support of the financial sector and only about 2 per cent to fiscal stimulus. Furthermore, it’s true that the rise in the deficit was somewhat higher than the OECD average, but this was because British governments were more dependent on revenues from the financial services sector."

Financial "exuberance" - and the accompanying waves of Minskyian fraud - stemmed from unsustainable profit expectations, themselves based on past profits made at higher rates of growth. Financial institutions took greater and greater risks across the world as profitability decreased in the real economy (due to the end of the IT consumer boom in the early 00s and spiralling oil prices). Essentially a "choke-chain effect" (James Galbraith) on growth was curtailing profitable investment, which led financial institutions to greater - and more fraudulent - lengths to secure higher returns. All it took was a downturn in US house prices to send mortgage securities prices downward and to presage a global banking collapse (it was very often European banks that were most exposed to these CDOs).

Have the Tories "sorted out Labour's mess" by cutting spending? Though they've decreased the spending deficit, the public debt has doubled relative to GDP because growth is sluggish and erratic and there is little to no renewed consumer demand built into the recovery. Moreover, the rest of the West is suffering from an absence of demand in the midst of continuing volatility. The government is withdrawing from the market, but private investors have no demand on which to base investment.

This is the harsh reality that refutes the neoclassical belief that government "crowds out" private entrepreneurs. What really happens is - in good times and bad - the state secures and expands markets. The state guarantees growing output by providing a safety net and a healthcare system. This makes private investment and growing demand by households possible. There is in fact no reason for the state to withdraw from this role. A strike by the holders of sovereign debt remains highly unlikely as long as the central bank (the Bank of England) controls interest rates. Moreover, there is no real reason for interest rates to rise. Inflation - which is broadly very low - doesn't need to be stamped out any time soon. Britain is not Greece. It has autonomy in its fiscal and monetary policy and can use both. The government can - and evidently does - live with high debts. The path to future growth - led not by speculative fraud in the financial sector and "asset-price Keynesianism" in homes and mortgages, but by worthwhile investment - lies in the public, not the private sphere.

The reality of Tory austerity, according Simon Wren-Lewis, is that the bulk of it has been postponed. The rate of cutting slowed significantly after 2012. This allowed the UK economy to grow - a bit. But growth has now halved. And the Tories are planning to cut a lot more next parliament. As Mark Blythe shows in his book about austerity, "expansionary contractions" (ie cutting to growth) don't work, ever. The so called "rational expectations" of creditors are a fantasy. If you command a printing press and a currency people want to hold in reserve, then you can always afford more debt. States are not like households. If public debt leads eventually to private wealth, eventually the scale of the public debt will decline relative to the size of the economy. That said, I don't think a bit of monetary stimulus (like quantitative easing) will finally end the crisis, because investment will remain cautious while volatile resource prices and financial risk prevail. A major New Deal conducted by the state is necessary. It ultimately takes the state to guarantee sustainable growth, not markets. The state doesn't "crowd out" markets but secures and sustains them. This is what happened in the US before WW2 and Europe after. Capital was essentially disciplined. This, incidentally, is what Varoufakis would like Europe to do when he talks about the ECB issuing bonds and giving the cash to the EIF. The alternative is drudgery as real wages decline, the state shrivels, and growth remains erratic, all in the name of an imaginary "return to normal" (to quote James Galbraith).

The risk of austerity is that it is a little more than a myth. Confidence may, as Krugman says, be a fictional driver of growth. But if austerity appears successful it will shape the future of politics for a long time. The mauling of Labour - and their own self-destructive commitment to austerity - is evidence of this. 

Progress and its Permutations: Theory and Practice

A version of this essay originally appeared at prague Revue.

What do we mean when we say "progressive"? The UK Liberal Democrats, currently in coalition with history's most successful and adaptable Conservative Party, have unblushingly described themselves as "progressive". Everyone from Paul Krugman to the Pew Research Center is sure that, despite the drone strikes and increasing power of a financial plutocracy, the Obama administration is a "progressive" one. The Economist, meanwhile, insists that Obama take advice from Republicans if he's to be a "true progressive". Reflecting the transatlantic trade in political jargon, the term has loosed itself from geographical and ideological moorings, becoming universally accepted shorthand for dispassionate, even-handed public policy. In ideological practice, what such semiotic flexibility implies is an ever more capacious "centre" and a juxtaposed "radical" fringe (from right-wing nationalists to social-democratic Greens). 

   In its country of origin, the United States, "progressive" has long been a liberal substitute for what "social-democrat" meant in Europe: thus the adjective (formerly applied in a technical sense to "progressive" income tax regimes, in which those at the top pay proportionately more than those at the bottom) became a proper noun: in hushed tones, "She's a progressive." Closely aligned with Civil Rights struggles throughout the 20th Century (a social coalition whose legislative highpoint came with the 1964 Civil Rights Act), the "progressive" wing of the Democratic Party was a proxy electoral representative of the often disenfranchised black working class. In terms of elections, however, the progressive social power base was overwhelmingly the unionised, industrial working class of the north.

Shifting the Balance of Class Forces 

   Geographical distribution—of industry and of working classes—has been crucial in determining the fate of American progressives at the ballot box. The main electoral strongholds of the progressives lay in the traditional northern home of urban industry, with its militant, unionized working class. As the Marxist economist Robert Brenner, writing in the New Left Review, has convincingly shown, the long-term breakdown of the social alliance between the Democratic Party and the Civil Rights movements coincided with the first of several grand geographical shifts in the concentration of US capitalist accumulative capacity. In sum, the declining industrial north, with its high-cost unions, was beaten down by a more muscular, low-cost, ideologically anti-union south. The white working class didn't, as is commonly assumed, ditch the Democrats over black civil rights; in fact, the unions remained loyal while capital relocated to the south. There the Republican Party waged a largely successful battle to win over a 'layer' (in Lenin's terms) of southern workers to a new ideology of free markets, thus sustaining low union density and stunting the growth of social movements against the free rein of capital.

   Any threat posed by progressives—either those of the Democratic Party or the working class and social movements aligned with them (not only for black civil rights but also, importantly, for women's rights, immigrants' rights and the rights of many other marginalised groups)—to the successful accumulation of capital has long since been neutralised. Indeed, with its domestic defeat at the hands of a globalising capitalist class, the situation was ripe for the globalisation of the term itself. Thus the pyrrhic victory: as the class content of the term "progressive" has been eviscerated, so has its international acceptability increased. In the Britain of today it is far less thorny to describe oneself as a "progressive" than to be saddled with the cumbersome sounding "socialist".

   David Miliband, recent loser of a UK Labour Party leadership election and favourite son of the Party's Blairite right, recently toasted Barack Obama's wrestling with the contradictions of progressive rule in straitened times. Although Obama has been forced to make welfare reductions that pain his liberal instincts, Miliband argues, his underlying progressive sensibilities have helped him understand their long-term unavoidability. All principle not aligned with the market is consequently deemed "dogmatism." In ideological terms, progressivism has identified itself with the market as the embodiment of progress. To attempt countervailing action, therefore, is to tempt the condemnation of history. The goals appear to be nothing more than making jobs (however short-term and disposable) and sustaining finance-based growth to the benefit of nobody but the imperious sounding "markets."

Playing Defence: The Obama Presidency

   For many, Obama has failed to define the field of play over the course of his presidency. For those sympathetic to him, the reasons for this are simple enough: despite the major legislative achievement (an extension of private healthcare), Obama's has been a largely "defensive" presidency. "Both Bill Clinton and Obama have spent as much time defending progressive advances—from Social Security and Medicare to voting rights and abortion rights—as they have trying to extend them," saidDavid Remnick recently in the New Yorker. Due to an intransigent right, Obama has had to narrow his horizons.   

   What specific set of achievements is Obama the perceived defender of? Little of the financial-regulatory architecture of the New Deal era remains intact, Glass-Steagall itself having been repealed by, of all people, a Democratic president. The welfare programs of Johnson's Great Society have become subject to a far higher degree of conditionality than its designers anticipated. Repeal of Don't Ask, Don't Tell and quiet support of gay marriage attest less to a clear legislative program than a series of public statements designed to evoke an attitude of pragmatic progressivism. Dodd-Frank, a damp squib of a regulatory effort, did exactly as it was designed to: that is, allow the president to look presidential while further guaranteeing Federal Reserve power over the practicalities of regulatory enforcement. This was "regulatory capture" not as unintended consequence of naive policy but as the guiding light of public ideals. It doesn't take an economist to realize that a central bank composed entirely of pro-market financialists with growing autonomy from any properly public oversight is at risk of making deeply partial choices. 

Obama has found the path to progressivism fraught with peril...

   Politicians like to talk about "winning coalitions": disparate groups of people rallying together around a hope-inspiring candidate. Viewed at a distance from the sterile politics of lobbyists and opinion polls, election victories look rather different. By Obama's 2008 victory, the organised, militant unionists of the 1960s and 1970s had been replaced with the modern era's lower middle class homeowners. This was, in essence, a 'layer' of the working class which had been initiated into patterns of high consumption and property ownership. The Democratic Party has consistently positioned itself as the champion and protector of these "middle class" interests. Take this as euphemism for a heavily-mortgaged, often debt-burdened lower middle class worried by federal and state-level insolvency and what that might mean for jobs. Thus the Democrats' defensive role looks more natural; its unwillingness (or inability) to expand social programs is a clue to its real interests. Certainly, worried homeowners came flooding back to the Democrats in the wake of the disastrous Bush presidency.

   Just as importantly, Obama has also benefited from the overwhelming support of newer immigrant voters, many of whom work in low paying, highly insecure jobs. Though these voters do not, for the moment, carry anything like the collective power of the established lower middle class, their numbers tip the balance of electoral forces in the Democrats' favour. Yet without organisation of poor and immigrant voters—along the lines of classical trade unions or more flexible social movements—Democratic policy will continue to bend itself towards the vulnerable lower middle class.

   Much as the earlier geographical relocation of industries and the revolution in technologies—from Detroit and the mid-west to Texas and Silicon Valley—all ultimately served to build a Republican voting bloc, so the recent economic crisis has personified another turning point in class alignments. The decline of domestic American industry through a combination of technological improvement, international competition and off-shoring of plants, has led to a permanent decline in long-term, stable jobs (the kind that historically leant themselves to unionisation). At the same time, a vast service industry has arisen, providing increasingly precarious work to a growing section of the population. Class in America has moved away from the traditional factory workplace, perhaps permanently. Yet the majority of the US population remains concentrated in the cities, the populations of which, though disempowered relative to their mid-century working class equivalents, are very likely to vote Democrat. This does not, however, guarantee progressive legislation. In fact, with the fractured, isolated character of the American working class being what it is, electoral politics is unlikely to properly represent class interests. A long-term stalemate is likely to ensue, with the Democratic Party easily able to get elected but unable to implement redistributive or classically progressive policies (perhaps even incapable of articulating them).

A Legislative Stalemate? 

   One of the great ironies of demographic changes in the western world—with ageing societies rubbing up against new, resourceful immigrant communities—has been the strange sclerosis of the once-mighty parliamentary and legislative systems that underwrote western democracy. As societies themselves have become more fluid and more contradictory, politics has become simultaneously more inflexible and more myopically fixated on outdated electoral maths and the management of the jobs market. As has been widely noted, this sclerosis of the centre has allowed extremism to flourish on the margins.

   Increasingly alienated, unrepresented voters are turning away from the staid, technocratic language of mainstream politics, with its utter dread of "populism" and all energy not easily contained by central policy-makers, yet those voters find few institutions ready to bear their anxieties. The answer usually proffered by the social democratic or progressive mainstream is a reincorporation of former voters by an appeal to their "extreme" instincts. 

   The real answer is rather to move away from parliamentary and congressional centralism with its outdated obsession with the workplace and management of the jobs market. In fact, given the decline of the portion of the American workforce in stable jobs, perhaps the answer lies in developing novel, informal associations and political organisations not dependent on the old trade union and party systems. A reorientation of progressive politics away from the traditional prioritisation of the jobs market—to focus on, say, the provision of decommodified public goods (healthcare, social housing, utilities); the democratisation of finance; the development of civil society institutions and community initiatives independent of the discredited parties—might serve to reintroduce some energy and interest into the old ways of doing progressive politics. Otherwise, progressivism will continue to narrowly locate its voters' interests in cheap consumerism, the jobs market, homeownership, and credit expansion to support it all. Framed in those bleak terms, what conservative wouldn't want to see a little more progress, after all?           

Image via wikimedia

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 "über-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.

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.