The silent British jobs crisis

Lazy and workshy

The Jarrow Marchers: feckless and workshy

In 1936, at the height of the Great Depression, unemployed workers from Jarrow marched almost 300 miles to Westminster, led by their Labour MP Ellen Wilkinson, in protest against poverty and unemployment. When they finally got there, their petition was accepted and little more was done. The last marcher died in 2003, though one man who took part in the final leg of the protest held on until 2012 – just long enough to see the same catastrophic mess happen all over again.

The Work and Pensions Secretary Iain Duncan Smith, who has done so little to help the unemployed yet thinks he has done so much, was involved recently in what is usually called a ‘heated debate’ with radio presenter James O’Brien (available here). While there was, as usual, more heat than light, O’Brien was the first interviewer I’ve heard to actually put the concrete figures – not just about unemployment, but about vacancies – to Mr Duncan Smith.

The government have

identified two key problems with the current system:

  • work incentives are poor, and
  • the system is too complex.

We are reforming the system to help people to move into and progress in work, while supporting the most vulnerable.

Reforming the benefit system aims to make it fairer, more affordable and better able to tackle poverty, worklessness and welfare dependency. We are committed to overhaul the benefit system to promote work and personal responsibility.

So the problem, in their estimation, is that there aren’t enough incentives to get into work. The welfare system has trapped people, and the most effective way of tackling the problem is by changing the psychology and incentives of the unemployed.

That’s what the government say. It’s also what the Daily Mail – owned by the 45-year old Viscount Rothermere, a friend of David Cameron who inherited his £1.02 billion fortune from his dad – would have you believe. But what are the actual facts?

According to the Office of National Statistics, there are 2.5 million people unemployed in the UK. That is 7.8% of the working population. The government will constantly tell you that this is down on last year, and indeed it is – by 0.6%. But before you pop out the champagne, it’d be wise to dig a little further.

A sudden burst of laziness?

A sudden burst of laziness?

The first thing to notice about this chart is that unemployment rather mysteriously correlates with the wider economic crisis. How strange! What stood at 5.3% in 2007 reached a peak of 8.5% in 2011. This seems to put into question the claim of the government that the problem is the welfare system, rather than the wider economy…

The second thing to notice is that, after the sudden rise in 2007/8, the unemployment rate was ever-so-slightly beginning to trend down by  2010. This is in keeping with the very tepid growth that stood when Gordon Brown left office. But then, under the Coalition, we see unemployment dramatically sharpen upwards again, to 8.5%. So the boasts of the government that unemployment is falling essentially amount to “We made it worse, and now we made it better again.” Except even ‘better again’ is a stretch: unemployment now is essentially exactly where it was when the Coalition came to power, with a hell of a lot of added misery in between.

So next time you hear a Tory (or a Lib Dem, if they even still exist) boasting that unemployment is falling, remember that.

Now how do these figures break down?

Oops!

Oops!

More than half have been unemployed for over six months. And a third have been unemployed for over a year. It is this final category that is known as the “long term unemployed”. Of those 879,000 long-term unemployed, 442,000 have been unemployed for more than two years. And for all the boasts of IDS and Co, this number has decreased by only 1000 since the summer.

So in Britain today there are: 2.5 million unemployed, of which 879,000 have been unemployed for more than a year. But I’m afraid it gets worse.

There are 974,000 unemployed people under 25, and this is up 11,000 since the summer. The youth unemployment rate in Britain is 20.8%. All that talk of a ‘lost generation’ is no exaggeration. And unfortunately, one of the first acts of the new coalition was to scrap Labour’s Future Jobs Fund, which it subsequently discovered was actually quite a success.

But no! Don’t let out a breath yet! It gets even worse.

The number of people underemployed – that is, people who are working part-time but would like (and in fact probably need) to work full-time – has risen by one million since the crisis began, now standing at 3.05 million people. This is 10.5% of the entire workforce.

ffs.

ffs.

So when you add it all together, there are 2.5 million people unemployed – without work at all – and 3.05 million people underemployed. In other words, there are 5.55 million people in the UK today who want full time work but do not have it.

So let’s recap for the final time before the cherry on the cake.

Unemployed: 2,500,000

Underemployed: 3,050,000

of which

Youth unemployed: 974,000

Long-term unemployed: 879,000

And how many vacancies are there in the UK? How many jobs have these lazy scroungers rejected?

Drum roll please!

“There were 487,000 job vacancies for November 2012 to January 2013…”

Oh.

Oh bollocks.

So there you have it. For the 2.5 million jobless in the UK today, there are just 487,000 vacancies. In other words, less than half the number of youth unemployed alone.

These are the facts you will rarely hear a government minister or apologist refer to. But they are there in black and white. And when they are raised in the IDS interview, his only response is to say ‘Well I didn’t say there was a magic wand’. Great, thanks!

There is a silent jobs crisis in Britain today, and all the government has done thus far is fiddle the statistics and make it worse. So the next time you hear a government minister say they are on the right track, remember what they choose to ignore.

Oh, and by the way Mr Cameron: there is an alternative.

Update: Since the time of writing – that is, in just sixteen hours – the unemployment rate has gone upIt now stands at 2.52 million. Most stark has been the case of under 25s: youth unemployment has risen from 974,000 to 993,000 – now standing at 21.2%. The total number of people wanting full-time work but unable to get it therefore stands at 5.57 million, with youth unemployment just under one million. Great job guys! Keep it up!

Advertisements

The Spirit of ’45 and the Spectre of ’79

The people made tremendous efforts to win the last war also. But when they had won it they lacked a lively interest in the social and economic problems of peace, and accepted the election promises of the leaders of the anti-Labour parties at their face value. So the “hard-faced men who had done well out of the war” were able to get the kind of peace that suited themselves. The people lost that peace. And when we say “peace” we mean not only the Treaty, but the social and economic policy which followed the fighting.

In the years that followed, the “hard-faced men” and their political friends kept control of the Government. They controlled the banks, the mines, the big industries, largely the press and the cinema. They controlled the means by which the people got their living. They controlled the ways by which most of the people learned about the world outside. This happened in all the big industrialised countries.

Great economic blizzards swept the world in those years. The great inter-war slumps were not acts of God or of blind forces. They were the sure and certain result of the concentration of too much economic power in the hands of too few men. These men had only learned how to act in the interest of their own bureaucratically-run private monopolies which may be likened to totalitarian oligarchies within our democratic State. They had and they felt no responsibility to the nation.

So reads the preface to ‘Let Us Face The Future‘, the 1945 Labour Party manifesto, which ushered in the most radical government in British history. In just six years, Clement Attlee’s leadership saw: the implementation of the Beveridge Report – including child benefit, universal pensions and sick pay; the nationalisation of the railways, water supply, electricity, gas, telecom and the mines; significant improvements in the conditions, hours and pay of workers; a deliberate policy of full employment; over a million new homes built, most of them council houses; and universal health coverage for the whole population in the form of the NHS. This is a remarkable record, especially when set against the misery that followed the First World War. It is this new political programme that Ken Loach’s documentary ‘The Spirit of ’45’ seeks to understand.

The film consists of interviews with ordinary people today (some who remember the Attlee Government, some who are experts in various fields), supplemented by archival footage of the ’45 election and the subsequent government. Sadly there was only one speech by Nye Bevan (I am constantly searching for audio of him speaking…), but there was an amusing party political broadcast by Clement Attlee, and fascinating footage of Winston Churchill being booed on the campaign trial by a crowd shouting “We want Labour! We want Labour!” Some of the stories of the people looking back were dreadful: one man whose mother died giving birth “for want of a pint of blood”; another who slept in a bed with hundreds of bugs and fleas. This was all very moving. But what of the political substance?

In a live question and answer session broadcast after the film, Loach explained that the title is very deliberate. In his account, the key factor was the new consciousness – the ‘spirit’ – that had developed during the war. Tony Benn, reliably appearing as always, gives expression to this new consciousness: “People began to say, if we can have full employment to kill Germans during the war, why can’t we have full employment to build homes after it?” This is undoubtedly correct. The ease with which the unemployment of the Great Depression had been abolished by the war, and the leading role suddenly taken by the state in the organisation of the economy (including temporary nationalisation of the mines and central planning of the railways), opened people’s eyes to the possibilities of a new economic model. Particularly interestingly, this was not merely a passive phenomenon, but was actively encouraged by the wartime coalition: copies of the Beveridge Report were distributed amongst the troops abroad, and they were ordered to form weekly political discussion groups. All rather Red Army!

So the film covers and articulates this new political spirit well. Following this general overview, we are treated to small histories of the major reforms: a section on health, a section on the railways, a section on housing, etc. I felt these sections were somewhat overreliant on personal anecdotes; actual facts and figures would have been helpful (ie. how many new houses were built; how and who did the government pay for the railways and mines?) But the personal stories did bring an important human element to it, with comedy and tragedy often together.

And it is on this note that we are listening to a cute little old man extol the greatness of these reforms, saying “Anybody who tried to attack all that, we should fight”, and then, suddenly, we cut to…

Satan in a skirt?

Satan in a skirt?

And this is where the problems start.

The arrival of Thatcher on screen was greeted with an amusing array of hissing and booing from the audience, and very little else from the film. No context for her rise to power is given. That she won three general elections comfortably is not even shown, let alone explained. No Winter of Discontent, no inflation or strikes, no problems whatsoever. In a mirror of the list of industries nationalised at the start of the film, at the end we are treated to a list of privatisations. Mrs Thatcher apparently swooped into the New Jerusalem, Satan in a skirt, and single-handedly destroyed all that the war generation had achieved.

The film from this point on becomes laced with simplicities. ‘Greed’ replaced ‘working together’. Thatcher ‘made it all about the individual’. No doubt Thatcher brought in (and/or was the product of?) a more individualistic age. But the binary distinction drawn between the selfless post-war era and the selfish Thatcher one is simply untenable. In fact, weren’t we told in this very same film that the only way Bevin was able to create the NHS was by “stuffing [the doctors’] mouths with gold”?

And it is in this contradiction that the film’s problems lie. Although Tony Benn does make passing comment that in many of the nationalised industries, “all that happened was you replaced the corporate manager with a bureaucratic manager”, this is generally glossed over. In fact, even at its peak the Attlee Government only nationalised 20% of the overall economy. The rest was left in private hands, as before (albeit, facing a far more powerful labour movement – to which we will come). In other words, contrary to the claims of some rabid Tories, Britain under Labour was never a socialist country. At best, it was an island of (particularly bureaucratic and state-centred) socialism in a sea of traditional capitalism. What new political consciousness had been birthed by depression and war found precious little room in which it could breathe. And while the railways and the mines – starved of investment for decades – did get the support they needed, the nationalisations set a pattern that became all too familiar in the post-war years: public ownership for failing companies, private ownership for successful ones (including, most crucially, the banks – Alistair Darling was to their left on this one…)

Perhaps it is worth considering the words of James Connolly, writing in 1899:

One of the most significant signs of our times is the readiness with which our struggling middle class turns to schemes of State or Municipal ownership and control, for relief from the economic pressure under which it is struggling. Thus we find in England demands for the nationalisation of the telephone system, for the extension of municipal enterprise in the use of electricity, for the extension of the parcel system in the Post Office, for the nationalisation of railways and canals…

But all this notwithstanding, we would, without undue desire to carp or cavil, point out that to call such demands ‘Socialistic’ is in the highest degree misleading. Socialism properly implies above all things the co-operative control by the workers of the machinery of production; without this co-operative control the public ownership by the State is not Socialism – it is only State capitalism…

Therefore, we repeat, state ownership and control is not necessarily Socialism – if it were, then the Army, the Navy, the Police, the Judges, the Gaolers, the Informers, and the Hangmen, all would all be Socialist functionaries, as they are State officials – but the ownership by the State of all the land and materials for labour, combined with the co-operative control by the workers of such land and materials, would be Socialism.

The great nationalisations of 1945 are certainly impressive. But the idealistic tint given them by the film does not accord with the complex reality. Other failures are also ignored: the House of Lords remained pretty much untouched; so did the monarchy, and the landowning aristocracy. The public schools were not addressed, and nor were the concentrations of press power that soon set about a propaganda campaign against the government.  Social matters, such as women’s rights or gay rights, were left for future generations. (And if it seems unfair to expect such enlightenment in 1945, it’s worth remembering that the Bolshevik Revolution had legalised homosexuality, abortion and divorce nearly thirty years before). Although, to be fair, it wasn’t just negatives; other great achievements – such as independence for India – were also left out.

Loach defended his film in the Q&A (alongside wunderkind Owen Jones and the awesome Dot Gibson from the National Pensioners Convention) by appealing to limited timing, and that’s a fair point (though at only ninety minutes long, it did go by very quickly). But by not even touching on the 1970s – to my mind, as important as the 1930s for the lessons it provides – the strength of analysis is lost, and the documentary can be fairly accused of at least mild nostalgia.

So what happened in the 1970s? Why did the post-war consensus break down? It’s a crucial question. Just as the spirit of ’45 did not come out of nowhere, the spirit of ’79  (or perhaps, more accurately, the spectre of ’79) was shaped by the struggles that preceded it. In the case of the 1970s, these were the precise opposite of the struggles of the 1930s. Not deflation, but inflation. Not mass unemployment, but a labour shortage. When Ted Heath held the 1974 election on the slogan ‘Who governs?’, the answer was pretty clearly ‘Not you mate’. Difficulties had begun around the world in 1968/69 as inflationary pressures rose, and economic and political militancy increased. The ‘Siouxante-Huitards’ – ’68ers – had not experienced war or depression. The new prosperity of the ‘Golden Age of Capitalism’ created new consumer and wage expectations, and these came to a head in the late 60s. As labour militancy increased, Barbara Castle – then Employment Secretary – offered a white paper called In Place of Strife as an attempt to curb strikes. But this was considered an unacceptable intrusion by the union leadership, and with the support of some in the Labour cabinet – including, ironically, James Callaghan – the bulk of the proposal was dropped and a voluntary concordat formed with the unions instead. Additional factors in the inflation rise may include increased American armaments spending as the Vietnam War escalated, and the devaluation of sterling in 1967. But it was in the following decade that the monster really took off.

Babs > Maggie

Babs > Maggie

Three factors came together in the 1970s to produce explosive rates of inflation. The first was the sharp rise in the oil price in 1973 (following the Yom Kippur War and the subsequent OPEC embargo) and 1979 (following the Iranian Revolution). The second was the liberalisation of monetary policy around the world: most importantly the final destruction of the Bretton Woods system when Richard Nixon closed the gold window in 1971 (and the inflationary expectations that arose thereafter), but also through more specific deregulation. In Britain for example, the Heath Government introduced ‘Competition and Credit Control’, a new policy whereby the Bank of England no longer directly regulated the creation and allocation of credit. The shocking result was a large increase in the money supply.

But most important of all was the historically unprecedented bargaining power of labour. Here is a chart showing crude oil prices since 1970 set against inflation in the United States…

https://i1.wp.com/static.seekingalpha.com/uploads/2011/3/8/saupload_oil_inflation.png

Here is the inflation rate in Britain…

The inflationary parallels (both between Britain and America, and between inflation and the price of oil) are remarkable. But notice something else: there have been steep rises in the oil price since. Yet these have not led to similar bursts of inflation. One of the major explanatory differences must be the following:

The bargaining position of the working class grew dramatically in the period following the Second World War. (In fact, it was growing during the Depression and the war itself, but unemployment and price controls respectively kept wage demands in check). But it was precisely in that militant period of 1968-79 that trade union membership peaked. This empowered the workers to demand wage increases to meet the price increases, and this in turn set off an inflationary spiral. The initial crisis of ’73-75 came to an end with the end of the OPEC embargo, slightly more restrictive monetary policy, and the election of a Labour government. But as Hegel famously said, all historical events must happen twice. The return of the inflationary crisis in the late 1970s made it clear that this was a systemic problem. And the new Conservative leader was the only one in Britain who showed an understanding of what this meant.

The distribution of income between wages and profits – between labour and capital – is a political phenomenon. It occurs according to the balance of economic power in society. In the post-war era, and particularly from 1968 onwards, the balance of power was significantly in the hands of the workers. This power allowed them to acquire an ever-greater share of revenue:

http://duncanseconomicblog.files.wordpress.com/2011/04/wage-share.jpg

But this presents an almost insurmountable problem for a capitalist economy. For just as growth depends on investment, under capitalism investment depends on profit. It is the profitability of a company, and of an economy more generally, which provides both the funds and the motive for new investment. But when the pool of revenue accruing to the capitalist begins to dry up, so too does the basic mechanism of the capitalist economic system. If capitalism is to be preserved, the barriers to its profitability must be smashed.

It's the class war, stupid!

It’s the class war, stupid!

As you can see, this is precisely what occured. The great Marxian economist Michal Kalecki not only created the Keynesian solution to unemployment three years before Keynes, he also identified the limitations to the liberal-Keynesian model in 1944 – before it was even implemented:

We have considered the political reasons for the opposition to the policy of creating employment by government spending.  But even if this opposition were overcome — as it may well be under the pressure of the masses — the maintenance of full employment would cause social and political changes which would give a new impetus to the opposition of the business leaders.  Indeed, under a regime of permanent full employment, the ‘sack’ would cease to play its role as a ‘disciplinary measure.  The social position of the boss would be undermined, and the self-assurance and class-consciousness of the working class would grow.  Strikes for wage increases and improvements in conditions of work would create political tension.  It is true that profits would be higher under a regime of full employment than they are on the average under laissez-faire, and even the rise in wage rates resulting from the stronger bargaining power of the workers is less likely to reduce profits than to increase prices, and thus adversely affects only the rentier interests.  But ‘discipline in the factories’ and ‘political stability’ are more appreciated than profits by business leaders.  Their class instinct tells them that lasting full employment is unsound from their point of view, and that unemployment is an integral part of the ‘normal’ capitalist system.

Neoclassical economists refer today, without a hint of irony, to the ‘natural rate of unemployment’. As in so many things, Marx pre-empted them by a century, in discussing the ‘reserve army of the unemployed.

This then is the explanation for Thatcherism, and this was what was lacking in Ken Loach’s film. Thatcherism was not the product of one woman, nor was it the product of ideas alone. Thatcherism was the only logical solution to the crisis short of moving beyond capitalism itself – something that obviously wasn’t on her radar. While most of the left were woefully ill-equipped to understand the historic question before them, some did. But that is a topic for another day.

Syriza and false dawns

I have just returned from a gathering at Friends House in Euston, for a talk by Alexis Tsipras. Tsipras is the head of SYRIZA, and by virtue of that party’s success in the Greek elections of 2012, Leader of the Opposition. He spoke vividly about the crisis in Greece: Between 2008 and 2012, GDP declined by a shocking 20%, and there is no end in sight as Greece enters its sixth year of recession. Official unemployment now stands at 26%, up from 24.8% the previous quarter and 20.7% this time last year. For the young it is even worse: 57.8% of those between 15 and 24 are unemployed. And in both instances, women suffer more than men: 29.7% of women are unemployed against 23.3% of men, and 65% of all women under 25. With funding for public hospitals cut by 40% many are going without drugs, and food banks and homelessness have proliferated across the country. The minimum wage has been cut by 22% (and 32% for the young) and real wages have, according to some estimates, fallen by an unbelievable 25%. And yet, in spite of all this, the Greek national debt has continued to dramatically rise.

This is a crisis of staggering proportions. For point of comparison, unemployment in the US during the Great Depression peaked at 25%; in Germany, it only took 30% to propel Hitler to power. We rightly look back at that time as an era of shocking suffering and incredible political incompetence. Well, it seems that history does indeed repeat itself, for we are witnessing the same thing all over again – though traces of tragedy far outweigh the elements of farce.

And quite apart from the grim economic realities, our times also find echo in the disturbing rise of the fascist party Golden Dawn, whose leader has openly described himself as a ‘racist’, and who are now polling as high as 12%.

It is against this backdrop that Alexis Tsipras was speaking, and indeed against which the importance of Syriza has grown. In 2009, their vote share stood at 4.6%. When parliamentary elections were held in May 2012, they quadrupled their number of seats and received 16% of the vote. When the mainstream parties failed to form a government (the social democratic and former governing party PASOK having been almost wiped out), new elections were held in June, at which Syriza received 27% – just under 3% less than the conservative New Democracy party, who now lead the government in Athens.

The success of Syriza therefore marks a sadly rare turn to the left in times of economic crisis, and despite some reports that the police are particularly supportive of Golden Dawn, wider Greek society has thus far avoided the descent into scapegoating that all too often accompanies economic crises. It was suggested at the talk that this may have something to do with the heroic role played by the Greek left against the Nazis, and later against the military junta that ruled from 1968-74.

Though Tsipras was disappointingly vague on detail, he did offer a compelling understanding of the true nature of austerity. The Greek government is presently in a desperate scramble to sell off anything it can find, including beaches, ports, and the water supply. There is even talk that museums and historical sites could be put up for sale. ‘All that is solid melts into air…’ This is a historic moment: the first time that the shock therapy so frequently meted out by the West to the poor of the world is turned on the West itself. And as Slavoj Zizek brilliantly points out, “Greece is not an exception. It is one of the main testing grounds for a new socio-economic model of potentially unlimited application: a depoliticised technocracy in which bankers and other experts are allowed to demolish democracy.” And if this sounds melodramatic, you probably do not know that Germany proposed only last year to appoint a ‘budget commissioner’ with the power to overrule the elected Greek Parliament.

The aim is simple, and though cloaked in beneficient rhetoric, it occasionally erupts to the fore as in the German suggestion above. The aim is to demolish all alternatives to neoliberalism and all barriers to the accumulation of profit. Whether the European political class genuinely believe this will lead to recovery, or whether they are simply using the fog of crisis as a cover, is immaterial. The end result is the same. The living standards and bargaining power of the working people of Greece (and Portugal, and Ireland, and Spain, and on and on and on) will be broken; those spheres of public life separated from the endless pursuit of profit will be eradicated; and the power of business and finance will reign supreme and unchallenged across the continent. Tsipras understood all this, and articulated it well; certainly far better than some.

But there is a problem. We’ve been here before. Francois Hollande was elected French President in May 2012 on a broadly anti-austerity platform. By November, he was implementing spending cuts. The right were quick to crow that this proves the truth of their facile mantra, excavated from Thatcher’s acidic mouth, that ‘There Is No Alternative‘. Of course it proves no such thing. Or at least, not in the way they think it does.

I intended to ask Tsipras a question, but wasn’t picked. A girl in the audience thankfully asked something similar however, in just three words: Euro or drachma? The answer Tsipras gave shows a grave misunderstanding of the problem facing Greece, and does not bode well for the success of any future Syriza government.

His answer to the question – should Greece keep the euro, or return to its old currency the drachma – was (paraphrasing): ‘It does not matter whether we have the euro. Look at Britain. You have no euro, does that mean no austerity?’ At this, some people in the audience laughed – haha, what a clever point. No. It is a stupid point, for reasons I will make clear in a moment. Tsipras then continued ‘But that does not mean we will waste our bargaining power. Greece is just one part of a long chain in the eurozone.’

Quite apart from the contradiction in the latter part of the answer – how can membership of the euro simultaneously ‘not matter’ and be a powerful bargaining chip? – the main problem for Greece is precisely its membership of the euro. For all the talk of the Greek debt crisis, or the Spanish debt crisis, or the Irish debt crisis, none of these countries are the most indebted in the world. That honour, in fact, belongs to Japan. You’d expect, then, for the Japanese debt crisis to be all over the news too. Yet it is nowhere to be found. For over fifteen years, pundits have been predicting an imminent sovereign debt crisis – which would manifest in rocketing bond yields, as has been observed in Greece:

Historical Data Chart

In fact, this has been the result:

https://i2.wp.com/www.tradingeconomics.com/charts/japan-government-bond-yield.png

Yes, you are reading that right. The axis on the first chart (Greek 10-year bond yields) reaches 50. The axis on the Japanese chart reaches 2. What the hell is going on here? Greek debt is at 170% of GDP, and the rate of interest the Greek government must offer lenders rockets accordingly. The Japanese debt is 220% of GDP, and not only does nothing bad happen, it actually gets cheaper for the government to borrow. For over ten years Japanese debt has got bigger and bigger and 10-year bond yields have barely budged. Two-year bond yields are effectively zero. Those who have followed the drama over the downgrades of the United States by S&P in 2011 and the United Kingdom earlier this year will recognise a familiar pattern.

For good measure, let’s compare some more. Here’s Portugal…

Historical Data Chart

…and Ireland…

Historical Data Chart

…and Italy…

Historical Data Chart

…and Spain.

Historical Data Chart

Now here’s Britain…

Historical Data Chart

…and here’s the United States…

Historical Data Chart

Well isn’t that just odd. One the one hand you’ve got Portugal, Ireland, Italy, Greece and Spain – the so-called ‘PIIGS’. The price of their debt shot dramatically up. And on the other hand, you have Japan, the UK and the US, who have all been censured by the international credit ratings agencies, and all of whom have experienced the precise opposite of the PIIGS. The causation cannot lie in the size of the national debts – the national debt of the UK for example is larger than that of Spain. Nor can it be the nationality of the bondholders – while it is true that almost all Japanese debt is held domestically, the same is not the case for the UK. Nor can the cause lie in commitment to austerity, as Messers Cameron and Osborne like to pretend – the United States and Japan have made no concerted effort to cut spending, whereas Greece and Spain are the paragons of austerity. So what could possibly be the difference? Greece, Ireland and Spain on the one hand…Britain, Japan and America on the other…Hmm…

The difference is shockingly simple. Greece, Portugal, Ireland, Italy and Spain are all in the eurozone. That is, they do not control their own currencies. Unlike Britain or, for that matter, most other countries in the world, the countries of the eurozone have surrendered that power to the European Central Bank. That means there is a very real possibility that Greece or Spain or even France could literally run out of money. Unless the ECB is prepared to step in (which, under Mario Draghi, it has become more willing to do – hence the declining yields), those who have leant money to the eurozone countries are at real risk of losing it, especially if the governments of those countries give in to popular pressure and default on their debt. In contrast, there is no such risk for those holding British or American or Japanese bonds. It is impossible for those countries to be forced into bankruptcy. The only thing in question for those bondholders is the value of the money they get back, and that depends on all manner of factors (not least of which is the growth of the national economy). And in a time of general economic crisis, sitting your money in literally riskless bonds is a far safer bet than investing in companies that may well make a loss. This, incidentally, is a sure-fire test of stupidity. If you ever hear a British or American politician compare their country to Greece or the eurozone – and it happens disturbingly often, from Cameron and Obama down – you can be sure that person does not have the slightest clue what they are talking about, and ignore them accordingly.

So to return to Alexis Tsipras by way of Francois Hollande. In the happy event of a Syriza election victory, three things could happen. First: the German and European rulers could recognise they are fighting a losing battle and radically reverse their position in favour of a Marshall Plan-style reconstruction, and allow German wages and inflation to rise. This is what Tsipras articulated as his aim. Second: Syriza could argue for the above, fail to achieve it, and end up forced by the spectre of bankruptcy into continuing austerity measures. Third: Syriza could argue for the above, fail to achieve it, and leave the eurozone. This would allow Greece to adjust more naturally by devaluing the new drachma against the euro. It would not be painless, but it would be far less so than the austerity programme thus far.

The problem for Syriza therefore lies in this. The first option – a complete turnaround not just in Euro-German policy, but in over fifty years of German political culture – is incredibly unlikely. It is not unthinkable if the cost would be the collapse of the eurozone, but it is very hard to imagine. In the event of a Syriza victory, the expectation then must be one of immediate failure on its main objective: Frankfurt and Brussels will not be willing to reverse course. Yet if Syriza is still trapped in the view that the currency doesn’t matter – a surprisingly conservative conception of the neutrality of money – the third option will never seriously occur to them. Which leaves only option two, and all the economic suffering and political darkness that would come from such a disappointment of people’s hopes.

In sum, Syriza represent an important movement in the fight against austerity. They understand the political agenda behind the economic policy, and they show that a radical critique can find voice in a parliamentary democracy. But until they understand fully the role of the euro – as presently constituted, a neoliberal weapon extraordinaire – and act accordingly, they will remain doomed to repeat the failings of France. If the only alternative to Golden Dawn is a false dawn from Syriza, the future of Europe looks very dark indeed.