Reflections on Jack Rasmus’s book Looting Greece: A New Financial Imperialism Emerges.
By Kostas Pateras* / Source: Marxism Leninism Today.
Looting Greece: A New Financial Imperialism Emerges by Jack Rasmus. Atlanta, Georgia: Clarity Press, 2016. $24.95. 312 pp.
The prolonged capitalist crisis in Greece, the intense labour-people's struggles, the dramatic negotiations and contradictions around the Greek debt (for which the Greek people are not responsible), the rise of SYRIZA have all attracted the interest, and this is only natural, of analysts, commentators, journalists, and, of course, ordinary workers from all over the world.
In the last two years in particular, a plethora of books have been published that attempt to analyze these developments and draw conclusions. One such effort is Looting Greece: A New Financial Imperialism Emerges, a recent book by Jack Rasmus, a professor of economics and politics at St. Mary’s College in California, and a writer for Z Magazine and Counterpunch.
Through a study of the Greek experience, Rasmus argues that what we are dealing with a new kind of "imperialism," significantly different from the imperialism of the past. The book undoubtedly contains a great deal interesting information about the banking and financial systems of the USA and the EU and also about the course of the negotiations over the Greek debt.
But on closer study and taking into account the first-hand experience from Greece and the plethora of evidence, it becomes clear that this book fails to penetrate the essence of the developments. A careful reading from a Marxist perspective identifies serious methodological problems that can, regardless of intentions, lead to the exoneration of the capitalist system as a whole. So, we will try to contribute to the more general discussion on Greece, by focusing on and discussing some of the most serious problems that in our opinion are contained in this book.
To begin with, we should note that the despite the fact that the book is teeming with statistics and information, there are relatively few references and footnotes/endnotes. The references that do exist tend to be to English language sources. This is of significance as there are unfortunately some serious inaccuracies contained in the book as regards the political situation inside Greece. We should highlight some examples. The writer on pages 108, 115 and 116 refers to the Stavros Dimas affair, but in such a way as to present Dimas as being proposed for election in parliament by ND as the successor of A. Samaras (i.e. as Prime Minister).
In fact, ND proposed that Dimas should be elected by parliament as the next President of the Republic. And we should bear in mind that this is a significant inaccuracy as the Prime Minister is the head of government in Greece and the President has a more symbolic institutional role according to the Constitution. In addition, at various points (pages 133,146) it is suggested that the SYRIZA-ANEL government had increased, amongst other things, the minimum wage in its first days in office. But this has no basis in reality. What was actually the case was that they made some vague promises that this would happen in 2016, if the conditions allowed it.
However it is the methodological problems in Dr. Rasmus's approach that are more serious and can be divided into the following categories: character of the crisis, the international environs, the role of classes in Greek society, the reformation of the political scene and SYRIZA, issues related to imperialism/sovereignty. We would like to initiate a more general discussion of these issues below, as we believe they are crucial to understanding both the trajectory of developments in Greece and indeed globally.
Character of the crisis
The author of the book focuses on Greece's state debt and especially the various approaches to dealing with it, codified in the three memoranda, as being the main factors that led to the prolonged crisis. However, is this really the case? In reality, this position gives primacy to what are secondary issues related to the reproduction of capital and identifies the results of the crisis as being its causes. It sees the symptoms but not the illness.
The economic crisis in Greece manifested itself in the framework of the global synchronized economic crisis, which began in 2007-2008 in the USA and then later embraced the EU, Russia, Japan etc. which came about after a long period of capitalist growth that led to a sharpening of all the contradictions of the exploitative system. This resulted in disturbances in the system's functioning, the inability to manage the contradictions, which was expressed by the outbreak of an economic crisis. A crisis, which objectively leads to the destruction of productive forces (labour power and capital in the form of money, commodities and fixed installations).
It is important to note that there had been high levels of capitalist growth in Greece, well above the eurozone average, for nearly 20 years before the outbreak of the crisis. GDP had been increasing by an average of 3% every year.
The wealth produced by the workers multiplied in this period. But it was the plutocracy that profited from this process, increasing its profits 28 times over and accumulating a great deal of capital through the intensification of the rate of exploitation of the working class, the increase of surplus value and unpaid labour.
On the other hand, harsh anti-people measures have been implemented since the beginning of the 1990s, the general conditions of the working class and the popular strata deteriorated and unemployment remained at high levels even in the period of capitalist growth.
Of course, a way out of the crisis that would benefit capital requires the destruction of productive forces, above all of labour. Unavoidably, a section of capital will be destroyed, either through the closure of companies or through their merger with other companies (centralization) in order for the cycle of expanded reproduction to begin again.
The feature of the economic crisis particular to Greece is the combination of great depth with a prolonged duration (in the last 20 years Argentina and Brazil experienced similarly deep crises, but of a shorter duration, while Japan witnessed an economic crisis that led to prolonged stagnation, which it has not yet emerged from).
In essence, the crisis phase in the capitalist economy of Greece, something inevitable in the cycle of expanded capitalist reproduction, was complicated by problems related to uneven development in the context of the single currency/Eurozone, problems that manifested themselves through the sharpening of preexisting fiscal problems (large state debt as a percentage of GDP).
It was also connected to already existent problems of the capitalist economy in Greece, problems that are not related to some mistaken "productive model" that was implemented, but to issues of asymmetry in terms of the development of the capitalist economy (e.g. a very large and powerful shipping sector, a relatively small manufacturing sector, especially in the sector of machinery production). Such unevenness also characterizes other capitalist economies, on the basis of their position in the imperialist pyramid. Monopoly capitalism in Greece has developed significantly in Greece over the last 30 years, irrespective of the setbacks due to the recent crisis phase.
All this resulted in the deterioration of Greece's borrowing conditions inside the "capital market" and also of its negotiating position with the institutions of the Eurozone, EU and IMF (Greece's direct lenders). It resulted in the need for the recapitalization of the banks. The debt is the outcome of the intervention of the capitalist state in the economic cycle, an intervention that aims to facilitate the expanded reproduction of social capital, by using state funds in a variety of ways to reinforce capital and its ability to invest.
The various Greek bourgeois governments sought to resolve the problems related to the crisis through an acceleration of the “reforms” (i.e. the 3 memoranda and the related application laws) that aim at the more rapid concentration and centralization of capital, the liberalization of markets, the depreciation of labour power as a commodity, through a major reduction of salaries and the dissolution of collective labour agreements, the reduction of state spending that led to serious cuts in the salaries and pensions of a large section of state employees and the deterioration of their working conditions.
International Dimensions
In our view, the author underestimates and overlooks some important features of the international dimension to the developments in Greece.
Firstly, we should understand the EU as an inter-state imperialist alliance that advances the interests of the European monopolies. An alliance defined by uneven development and intra-bourgeois, inter-capitalist contradictions. If this clear, so it follows that the Eurozone is not just a run-of-the-mill monetary union but is part and parcel of this specific framework and consequently its problems cannot be mitigated through some form of banking union at a European level or mechanisms to encourage the closer cooperation of European banks.
It should also be understood that the measures being taken in Greece are largely EU directions for all its member-states, regardless of whether they have signed a memorandum or not. Such measures have been taken and are being taken in the EU as a whole. The crisis in Greece simply provided the opportunity for these pro-capital measures to be taken (i.e. the measures codified in the 3 memoranda) in a shorter time frame.
Any negotiations carried out by a Greek government (of whatever stripe) for a relative relaxation of the current strict restrictive policies would be integrally connected to and dependent on the overall struggle between sections of capital over the future of the Eurozone and EU. A struggle that intensified after the international synchronized crisis of 2009. The bases for the intensification of this struggle are the difficulties related to the stabilization (safeguarding) of the Eurozone's recovery, as well as the significant unevenness that can be witnessed at its centre (i.e. between Germany that is strengthening the advantageous position it has in relation to France and Italy).
It is on this objective terrain that France and Italy are pressing for the relaxation of monetary and fiscal policy and for Germany to undertake more burdens related to managing the problems of indebted Eurozone states (through the ECB).The US government supports this direction, as it is concerned about the danger of the destabilization of the international capitalist economy and also desires to restrict German hegemony in the EU.
However, the inter-imperialist competition is not limited to the narrow question of changing the economic management of the Eurozone. Two important contradictions of the international imperialist system and the relationship between them must be taken into account in order for the trajectory of the confrontations inside the EU today to be understood.
a) The contradiction of the Euro-Atlantic camp with the China-Russia axis, which is expressed in an intense way in the regions adjacent to Greece (see Ukraine, Syria etc.).
b) The struggle between the USA and Germany over hegemony in Europe.
Having said that, it should not be overlooked that all the capitalist states agree, irrespective of their differences concerning the management of the capitalist crisis, on the political imperative to restrict the rights and gains of the working class, to restrict wages and attack stable labour relations.
Classes in Greek society
Despite various references by the writer to the working class, ship owners etc; Greece is not approached as being a capitalist country like any other i.e. as having a specific class structure. This is particularly apparent from the underestimation of the position and role of the Greek bourgeois class, something that has obvious consequences in terms of the analysis of the policies of the Greek governments. The Greek bourgeoisie exists and has a strategy, makes clear class choices and is not just prey to the ambitions of some foreign imperialist powers (e.g. the German government).
We should also note that while there has been a reduction of capitalist production in Greece as a whole, there are sectors that have remained stable and also others that have strengthened their position (tourism, shipping). It is characteristic that the "resistance" of the SYRIZA-ANEL government to the 3rd memorandum was largely related to the taxation of the three most dynamic sectors of Greek capital: the pharmaceutical industry, tourism, shipping. In particular, one must not overlook the strength Greek shipowning capital (the Greek-owned maritime fleet is the largest in the world[i]), which has supremacy in its competition with the relevant sections of capital from the Netherlands, Germany etc.[ii] It also must not be forgotten that significant amount of Greek capitals are concentrated in foreign banks and offshore companies, waiting for the right conditions to reinvest with the maximum possible profitability.
The domestic bourgeoisie has a strategy and, based on the objective situation, adjusts/prioritizes basic goals that the negotiating line and economic policies of the new government attempts to serve. These priorities are:
a) The acquisition of foreign funding and state finances in order to ensure that the Greek economy can leave the phase of the capitalist crisis in a rapid and stable way. The Hellenic Federation of Enterprises, for example, supports Greece's continued membership of the Eurozone and stresses the importance of EU funding (the new European Structural and Investment Funds etc.)
b) The realization of major investments that will contribute to promoting the country as a transport hub for energy and commodities from the wider region.
c) The capitalist productive reconstruction that will also change the current sectoral structure of the economy in order to strengthen the orientation towards exports and the production of innovative competitive commodities and services.
In this framework, emphasis is placed on attracting investments for hydrocarbon extraction, logistics, renewable energy, specialized tourism, the food/beverage sector (with an export orientation). Sectors of the economy that could function as new powerhouses for capitalist growth are being prioritized together with the more measures to strengthen oceangoing shipping.
d) The promotion of “restructuring” measures to ensure cheap labour power and new profitable areas of investment for capital (e.g. flexible labour relations, the abolition of the social character of insurance, liberalization of markets, privatizations).
e) The modernization of the structure, functioning and infrastructure of the bourgeois state so that it can more effectively contribute to advancing the goals of the ruling class (e.g. the improvement of the tax collection capacity of the state).
The comprehensive promotion of these goals in order to enhance the competitiveness of the domestic monopoly groups requires that the country remain in the Euro-Atlantic framework of imperialist alliances.
The negotiating approach related to the relaxation of the restrictive monetary and fiscal policies of the Eurozone, the enhancement of bilateral relations with Russia and China, the active participation in the plans of the USA and Israel (see the various initiatives of the SYRIZA-ANEL government) do not dispute the basic commitments that flow from the country's (and indeed any country's) participation in the EU and NATO.
On the contrary, Greece's participation in the EU is to a large extent a precondition for the implementation of the specific investment plans of China and Russia regarding the transport of commodities and energy into the EU market.
Of course, agreement on the aforementioned strategic framework does not negate competition and differences that exist amongst sections of domestic monopoly capital as regards the prioritization of the country's relations with the various imperialist alliances.
The reformation of the political scene and SYRIZA
In our opinion, the book fails to interpret the political developments in Greece in their entirety and complexity. For example, despite the various criticisms of SYRIZA, especially as regards the course of the negotiations, it does not illuminate its real character. This is because Dr. Rasmus does not fully and objectively appreciate the way in which the capitalist crisis led to the reformation of the bourgeois political system and that SYRIZA's rise was a part of this process.
Indeed, this reformation occurred at the height of the economic crisis and its consequences. This process took on two basic features in 2012 (specifically during the two elections): a) The regroupment of social-democracy (whose prestige amongst the popular strata had been badly damaged due to its long participation in anti-worker governments) through a new political vehicle, SYRIZA and b) the emergence of Golden Dawn, a Nazi-fascist party, as a parliamentary force. SYRIZA, in these conditions, was transformed from being a small opportunist party into a vehicle for the new social-democracy-a process that was accelerated by the "defection" of sections of PASOK in the summer of 2012. It is indicative that 1/3 of SYRIZA's high level officials have a direct background in PASOK.
There is an attempt underway today to co-opt the people into the anti-people plans of the bourgeoisie, especially after the emergence of SYRIZA as the largest parliamentary party and its formation of a coalition government with ANEL (a small rightwing party with populist, nationalist positions).They aimed to utilize people’s hopes (or at least toleration) regarding the "first left government", which claims to be carrying out tough negotiations inside the Eurozone. Even after the anti-people terms and conditions of 3rd memorandum, SYRIZA presents itself as struggling for pro-people compensatory measures.
In addition, efforts are being made to foster the view that this party is allegedly different from the bourgeois neoliberal current because it does not leave everything to the arbitrariness of the markets, but supports the role of the state that supposedly can combine the promotion of competitiveness, health entrepreneurship, productive reconstruction with the management of the consequences of the "humanitarian crisis", i.e. extreme poverty and destitution.
This is the framework in which the policies, maneuvers and retreats of SYRIZA must be evaluated-not as mistakes, but as class choices.
Indeed, it is apparent that in this phase a social-democratic party can do capital's dirty work more effectively than other bourgeois parties. We could add here that it needs to be better understood abroad that SYRIZA in essence continues the anti-people political policies of the previous governments of the liberal ND party and social-democratic PASOK e.g the negative changes to labour relations and collective labour agreements, low wages, dramatic reductions in pensions, cuts in spending on health and education, the use of repression against workers’ mobilizations, the further assimilation of the country into the imperialist plans of NATO in the region, deepening military-political-economic relations with Israel etc. And this was true before the signing of the third memorandum.
Issues of imperialism/sovereignty
In the last chapters of the book, Dr. Rasmus develops a theoretical approach that refers to economic "protectorates", problems related to sovereignty, a new imperialism that uses financial mechanisms in order to loot entire nations. But in doing so he does not place the necessary importance on Lenin's groundbreaking analysis i.e. that imperialism is capitalism in the historical era that began at the end of the 19th and beginning of the 20th century and can be summarized in a nutshell as the monopoly stage of capitalism, with five basic economic features (which are described in his work of the same name).
Clearly, in every historical period, some more powerful, leading capitalist states stand out. However, there are constant changes in the relations and correlation of forces between states due to uneven development and this intensifies the antagonisms in the imperialist system.
Today, there are nearly 200 separate state entities. A web of unequal relations of interdependence amongst all the capitalist states has been formed in the contemporary imperialist system. This correlation of forces between the capitalist states is in constant state of flux. Powerful creditor-states from the 20th century have been transformed into debtor-states (e.g. the larger state debts of the USA, France and Italy today), while China is now a creditor-state. The change of Britain's strength in relation to India from the 20th to the 21st century is the most characteristic example.
Correspondingly, the formation of a "labour aristocracy" is not restricted to just a handful of powerful capitalist states. The expansion and deepening of capitalist relations of production in the contemporary imperialist system creates the potential for the emergence of the "labour aristocracy" in the majority of capitalist states.
Today, there are nearly 200 separate state entities. A web of unequal relations of interdependence amongst all the capitalist states has been formed in the contemporary imperialist system. This correlation of forces between the capitalist states is in constant state of flux. Powerful creditor-states from the 20th century have been transformed into debtor-states (e.g. the larger state debts of the USA, France and Italy today), while China is now a creditor-state. The change of Britain's strength in relation to India from the 20th to the 21st century is the most characteristic example.
Correspondingly, the formation of a "labour aristocracy" is not restricted to just a handful of powerful capitalist states. The expansion and deepening of capitalist relations of production in the contemporary imperialist system creates the potential for the emergence of the "labour aristocracy" in the majority of capitalist states.
Consequently, the splitting of the unity of the working class and the penetration of petty bourgeois views and ideology into the labour movement acquires a more general character in our era. Moreover, the bourgeois class itself chooses the path of ceding sovereign rights etc. in the framework of an imperialist alliance, for example, the EU or NATO, or even in the context of inter-state relations in order to safeguard its more general class interests, to find pillars of support and to perpetuate its hold on power. So it follows that the problems related to "sovereignty" have a class basis and their resolution is connected to the elimination of their causes i.e. the overthrow of bourgeois power.
The complexity of the functioning of the capitalist economy today cannot be interpreted in a comprehensive and correct way, if it is limited to the role and importance of states at the top of the imperialist pyramid.
Indeed, talk of "colonies," "protectorates," "centre-periphery" and a mechanistically one-sided understanding of the issue of dependency tends to lead to the whitewashing of the bourgeoisies of many countries and to the quest for a utopian just capitalist development, allegedly outside the framework of imperialism. By taking a non class approach to the issue of development, the writer, in essence, proposes withdrawal from the Eurozone, and even the EU, in order to ensure a return to economic "growth”. But what kind of growth are we talking about and who will benefit? As we mentioned previously, the tourist and shipping sectors have seen significant growth in recent years, despite the crisis. But this has been growth for the capitalists and not the workers in these sectors, who are experiencing at first hand all the results of all the anti-worker measures: cuts in salaries, abolition of basic rights, flexible labour relations, intensification of work, underemployment-unemployment.
The author also downplaysthe importance of the labour-people's struggles in recent years, which, despite their weaknesses and shortcomings, were able to impede and delay the implementation of the measures. We are talking about multifaceted struggles that have not stopped: dozens of general strikes and hundreds of other strikes in sectors and workplaces, demonstrations, roadblocks by farmers, occupations of company and government buildings, demonstrations, with communists in the front line.
The establishment and activity of PAME, the emergence of new and militant formations of the small and medium farmers and self-employed and the formation of a joint framework of demands are a significant source of strength for the people’s movement.
The economic crisis very clearly demonstrated that depth of the contradictions and difficulties of capitalism. It clarified the fact that capitalist growth itself prepares the ground for crises, i.e. the destruction of productive forces and the major increase of unemployment levels, as well as the mass expansion of the phenomena of destitution and poverty, the continuous degradation of the people’s needs, prostitution, drugs etc. This is also leads to the renewed intensification of employer and state intimidation, the sharpening of uneven developments and the outbreak of wars.
The developments and also the significant experience from the fierce class struggles in this period even more intensely highlighted the issue of the regroupment of the labour movement, the need to strengthen the anti-monopoly and anti-capitalist line of struggle and combined with this the increase of the level of organization and struggles, to reinforce the joint struggle and alliance with, the poor and medium farmers and urban self-employed against the monopolies, to form the People’s Alliance on a social basis, which will have the struggle for workers’-people’s power as its political proposal.
From this standpoint, the lack of references in the book to this accumulated experience raises, at the very least, some questions and is a cause for concern.
Last but not least, in this framework, anyone who wants to study the Greek reality cannot ignore regardless of the possible extent of their agreement of disagreement with the KKE, the activity and also serious scientific theoretical work[iii] carried out by the communist party over the past few years, which is widely accepted as being one of the basic factors that inspired, lent impetus and organized the struggles of the working class and popular strata.
Of course many other interesting and controversial issues are touched on this book, but we have limited ourselves to the discussion of some issues that we believe are of more general significance for the struggle of workers in Greece and internationally.
The discussion, of course, will continue and from this standpoint we hope to contribute to the clarification of questions and approaches, to the development of a methodological framework that can assist the labour movement of other countries in understanding and utilizing the useful experience and lessons which emerge from the Greek developments.
*Kostas Pateras is a member of the International Relations Section of the CC of the KKE (Communist Party of Greece).
[i] http://www.hellenicshippingnews.com/hellas-shipping-fleets-tonnage-up-by-22-as-greeks-share-of-worlds-fleet-rises-to-19-63/
[ii] PETROFIN RESEARCH © – Greek fleet statistics October 2015 based on data as of September 2015
DWT, Average Vessel DWT, and Number of Greek vessels figures are shown on an index scale using year 2001 as 100. The actual figures are also marked for each year.
The overall number of Greek vessels has gone up by 202 to 4909 from 4707.
II. Tonnage is also up by 24,675,319. Overall tonnage: 328,254,495 tons DWT, an increase of 7.52%
III. Age is also down again, to 12.73 from 13.26 in 2014 and 14.05 in 2013 and 14.7 in 2012.
IV. Using a 20,000 DWT cut-off, the average age of the Greek fleet has fallen to 8.71 from 9.14 years in 2014 and 9.83 in 2013.
V. The large Bulker fleet (over 20,000 tons DWT) has gained an impressive 163 vessels, its age is down to 8.6 years, its tonnage is up by 19.5m tons DWT and it has lost 6 companies.
VI. The large Tanker fleet (vessels over 20,000 tons DWT) shows a small increase in tonnage 220,751 tons DWT and a very small increase in unit numbers by 1. Its companies are down by one but age wise there was a drop, which shows a fleet renewal effort.
VII. The large Container fleet (vessels over 20,000 tons DWT) is a bit younger still, despite the fact that this is a sector that shows a slow rate of renewal. It has gained an impressive 2.9m tons DWT and it still is one of the very few sectors which show an increase in the companies that run them, up by 4.
VIII. Regarding the LPG sector, large LPGs (over 20,000 tons DWT), the number has gone up by 3 units, the fleet DWT is slightly up by 128,813 tons DWT and their age is also up to 13.7.
IX. The LNG fleet has expanded significantly with the addition of 24 vessels to last year’s 50 strong fleet.
X. The Greek fleet continues to expand in an ever more consolidated manner, as Greek companies are reducing
| TABLE 1 Year | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| Number of vessels in the Greek-based, Greek-owned fleet | 4110 | 4142 | 4085 | 4184 | 3970 | 4164 | 4346 | 4545 | 4763 | 4655 | 4714 | 4577 | 4573 | 4707 | 4909 |
| Change from previous year | 32 | -57 | 99 | -214 | 194 | 182 | 199 | 218 | -108 | 59 | -137 | -4 | 134 | 202 | |
| Petrofin Research © October 2015 | |||||||||||||||
| TABLE 2 YEAR | DWT | AVERAGE AGE | AVERAGE VESSEL DWT |
| 2001 | 150,978,565 | 21.41 | 36,734 |
| 2002 | 166,931,748 | 20.58 | 40,302 |
| 2003 | 171,448,133 | 20.51 | 41,970 |
| 2004 | 184,288,917 | 20.12 | 44,046 |
| 2005 | 176,411,750 | 19.9 | 44,436 |
| 2006 | 194,486,455 | 19.14 | 46,707 |
| 2007 | 208,001,159 | 18.7 | 47,860 |
| 2008 | 222,368,331 | 18.4 | 48,926 |
| 2009 | 237,288,216 | 17.6 | 49,820 |
| 2010 | 242,802,092 | 16.4 | 52,160 |
| 2011 | 256,174,041 | 15.92 | 54,343 |
| 2012 | 263,635,420 | 14.7 | 57,600 |
| 2013 | 281,467,983 | 14.055 | 61,550 |
| 2014 | 303,579,176 | 13.252 | 64,495 |
| 2015 | 328,254,495 | 12.729 | 66,868 |
[iii] The Theses of the party’s 19th Congress provide a characteristic example of the detailed analyses of the KKE both regarding the economy, social structure and political trends of Greece and also wider international developments. http://interold.kke.gr/News/news2013/2013-03-05-thesis.html
